Micro Chapter 3

Question 1

What is the difference between specialization and trade?

Answer 1

Specialization: what we should produce
Trade: what we should NOT produce

Question 2

Trade

Answer 2

Buying an item

Question 3

Specialization

Answer 3

producing an item

Question 4

Absolute Advantage

Answer 4

The comparison of productivity

Question 5

Comparative Advantage

Answer 5

Having the lower opportunity cost of producing a good

Question 6

Imports

Answer 6

Things we bring IN to the country

Question 7

Should we buy or produce an item?

Answer 7

We should buy ONLY if we do not have comparative advantage

Question 8

Exports

Answer 8

Things that we send OUT of the country