ECON Ch 4 Study Guide

What is the definition of absolute advantage?

• The characteristic of a society in which people rely on others for most of the goods and services they want

• A situation in which each of two individuals has something the other wants

• The condition that exists when someone can produce a good or service using fewer resources than someone else

• The direct exchange of goods or services without the use of money

What is the definition of barter?

• The characteristic of a society in which people rely on others for most of the goods and services they want

• A situation in which each of two individuals has something the other wants

• The condition that exists when someone can produce a good or service using fewer resources than someone else

• The direct exchange of goods or services without the use of money

What is the definition of coincidence of wants?

• The direct exchange of goods or services without the use of money

• The condition that exists when someone can produce a good or service using fewer resources than someone else

• A situation in which each of two individuals has something the other wants

• The characteristic of a society in which people rely on others for most of the goods and services they want

What is the definition of comparative advantage?

• The development of skills or knowledge in one aspect of a job or field of interest

• The direct exchange of goods or services without the use of money

• The condition that exists when someone can produce a good or service using fewer resources than someone else

• A situation in which each of two individuals has something the other wants

the allocation of separate tasks to different people, based on the principle of specialization

• division of labor
• separation of tasks
• specialization of work
• task allocation

the characteristic of a society in which people rely on others for most of the goods and services they want

• Financial reliance
• Economic interdependence
• Social dependence
• Community interconnection

the development of skills or knowledge in one aspect of a job or field of interest

• generalization
• specialization
• diversification
• expansion

Exchange of goods or services between parties who willingly engage in the transaction without any coercion or force.

• coerced transaction
• voluntary exchange
• compulsory trade
• forced exchange

large-scale manufacturing is also known as

• Mass production
• Artisan production

• Custom production
• Batch production

the ability to consume goods beyond the PPF because of specialization and trade with other countries

• gains from trade

• opportunity cost
• absolute advantage
• barter system