Comparative Advantage & Trade Pre-Test

If you have a "comparative advantage" in the production of a good/service, it means you have:

• A natural inherited talent for the production of the good/service

• A lower opportunity cost for the production of the good/service

• More available free time to pursue your interests and career goals

• A higher position of authority within society than someone without a comparative advantage

True or False: An economist would say that it is better for people to learn how to do things for themselves, rather than rely on other people for the things you need.

• True

• False

Henry Ford became successful as an entrepreneur and automobile manufacturer by pioneering the "assembly line." This is an example of the economic concept of:

• Differentiation

• Specialization

• Trade Deficit

• Opportunity Cost

If I can mow my lawn in 1 hour,

and my neighbor Zach can mow my lawn in 2 hours,

I should always mow my lawn myself because I am clearly better at it.

• True

• False

Most people today typically do not rely on "bartering" to get the goods/services they need.

• True

• False

If you export more goods than you import, your country will have a trade ____________________.

• Deficit

• Surplus

• Comparative Advantage

• War

A $1 bill is worth $1 because that's how much it costs to produce it.

• True

• False

Economically speaking, what is "wealth"?

• All of the money in your bank accounts and retirement accounts

• The monetary value of your assets and investments

• All of the money in your savings account, minus any debt

• The total value of everything you own

True or False: The U.S. typically exports more than it imports.

• True

• False

Which country is the world’s leading exporter of goods?

• The United States

• China

• India

• Singapore