Unit 1- The Capitalist Revolution

Question 1

What is the 90/10 ratio?

Answer 1

Average income of the richest 10% divided by the average income of the poorest 10%. (Income of 90th percentile divided by income of the 10th percentile)

Question 2

Purchasing power parity:

Answer 2

Statistical correlation allowing comparisons of the amount of goods people can buy in different countries that have different currencies

Question 3

Industrial revolution:

Answer 3

A wave of technological advances and organisational changes starting in Britain in the eighteenth century, which transformed the economy into one that was commercial and industrial

Question 4

Absolute advantage:

Answer 4

When a country can produce a good while using less input

Question 5

Comparative advantage:

Answer 5

When the cost of producing an additional unit of a good, relative to the cost of producing another good is lower than another country’s cost to produce the same two goods