Chp 3 Flashcards
1
Q
what satisfies individual’s wants & needs in the global economy?
A
-self sufficiency
-specialization in trade
-relying on others specialization in trade
2
Q
people should specialize in the product that they have less ______ _____ in
A
opprotunity cost
3
Q
if people don’t trade and ignore each other then…
A
each consumes what each produces
4
Q
comparing opportunity cost of a product to another producers opportunity cost of the same product is called _____
A
comparative advantage
5
Q
absolute advantage
A
amount of input to produce a product compared to another producer
6
Q
adam smith
A
trade and economic interdependance
7
Q
david ricardo
A
principle of comparative advantage
