*PRACTICE TEST* CHAPTER 4 QUIZ: GAINS FROM TRADE

Overall, TRADE:

• makes us wealthier

• improves our quality of living

• improves the variety of goods and services available to us

• all of these

What is an approach to production in which individual workers become highly skilled at a specific task?

• individualization

• specialization

• cooperation

• all of these

Adam Smith wrote about:

• absolute advantage

• communication

• Supreme Court

• specialization

___ is the generally accepted medium exchange that can be traded for goods and services.

• gold

• money

• credit cards

• cashier's checks

A _____________ ___________ is the act of willingly trading one item or service for another.

• involuntary exchange

• forced transaction

• voluntary exchange

• garage sale

Specialization encourages ____.

• arguments

• conflicts amongst countries

• trade

• coincidence of wants

When people specialize and trade, we depend on other _____________________ to produce many of the goods and services we want.

• absolute advantage

• comparative advantage

• countries

• neighborhoods

The allocation of separate tasks to separate people is called division of ___.

• tasks

• employment

• labor

• all of these

When people ___, the resulting division of labor increases productivity.

• specialize

• work really hard

• become managers

• all of these

Economic Interdependence is when we depend on other people/countries to produce many of the _____________________ we want.

• goods

• services

• both of these

• neither of these