Chapter 8 Terms

Question 1

Gains from trade

Answer 1

The benefit that comes from reallocating resources, goods and services to better uses

Question 2

Absolute advantage

Answer 2

The ability to do a task using fewer inputs

Question 3

Comparative advantage

Answer 3

The ability to do a task at a lower opportunity cost

Question 4

Specialization

Answer 4

Focusing on specific tasks