Econ: Chapter 4 Specialization & Trade Review

Which is the best example of specialization?

• A surf shop lowers the price on swimsuits.
• A dry cleaner spends extra time on grease spots.
• An assistant in a tailoring shop only replaces zippers.
• An online clothing outlet offers customized monograms.

How does division of labor increase productivity?

• Workers require minimal training.
• Workers require minimal training.
• Workers become expert at one task.
• Workers move often from job to job.

What is the main reason Americans specialize more today than the early pioneers did?

• We have more access to markets.
• We have more vocational training.
• We depend less on transportation.
• We live in less crowded conditions.

In a voluntary exchange, why do people give something up?

• to increase their self-sufficiency
• to get something they want more
• to allocate scarce resources fairly
• to allocate scarce resources fairly

How does the Commerce Clause promote economic interdependence?

The Congress shall have Power to . . . regulate Commerce . . . among the several States.
—Article I, Section 8, U.S. Constitution

• It discourages local markets.
• It defines legislative powers vaguely.
• It keeps states from creating trade barriers.
• It puts pressure on states to increase production.

What does it mean to say that Jen has a comparative advantage over Julian for weeding people’s gardens?

• Jen weeds more quickly than Julian does.
• Jen’s expertise at weeding is greater than Julian’s.
• Jen can charge more for weeding than Julian can.
• Jen’s opportunity cost for weeding is lower than Julian’s.

Which of these is the main reason for national differences in comparative advantage in producing raw materials?

• differences in allocations of natural resources
• differences in cultural traditions
• differences in monetary systems
• differences in local business practices

Why has much clothing manufacturing moved from the United States to other countries?

• Most of the market for textile products has shifted overseas.
• American workers have a weaker work ethic today than in the past.
• Education in this country has not kept up with the needs of the 21st-century economy.
• Nations with large, low-skilled workforces have a comparative advantage for assembly-line production.

How does trade increase the value of an item?

• It makes the item more expensive to buy.
• It puts more different goods into competition.
• It provides work for storekeepers and truckers.
• It transfers the item to someone who values it more.

Which term best describes the fact that we depend on others to produce most of the goods and services we want?

• absolute advantage
• division of technology
• commercial productivity
• economic interdependence