Micro Chapter 3 Flashcards Preview

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Flashcards in Micro Chapter 3 Deck (8):
1

What is the difference between specialization and trade?

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

2

Trade

Buying an item

3

Specialization

producing an item

4

Absolute Advantage

The comparison of productivity

5

Comparative Advantage

Having the lower opportunity cost of producing a good

6

Imports

Things we bring IN to the country

7

Should we buy or produce an item?

We should buy ONLY if we do not have comparative advantage

8

Exports

Things that we send OUT of the country

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