Thẻ ghi nhớ: chapter 2: interdependence and the gains from trade | Quizlet

interdependent

Countries are interdependent on each other in order to develop better

comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

the price of trade

- Must lie between their opportunity costs

Specialization

Focus on one thing and one part

absolute advantage

the ability to produce more of a given product using a given amount of resources

By scientific method we mean

the dispassionate development and testing of theories about

how the world works.

An economic theory about international trade that is based on the

assumption that there are only two countries and two goods

can be useful in helping economists understand the complex world of

international trade involving many countries and many goods.

The circular-flow diagram is a

A. visual model of how the economy is organized.

In the simple circular-flow diagram, the participants in

the economy are

B. households and firms.

factor of

production

land - labor - capital

In the simple circular-flow diagram, households

own the factors of production

Which of the following statements about the circular-flow

diagram is correct?

The diagram leaves out details that are not essential for understanding

the economic transactions that occur between households and firms.

Any point on a country's production possibilities frontier

represents a combination of two goods that an economy

B. can produce using all available resources and technology.

Which of the following is the most accurate statement about

production possibilities?

C. An economy can produce at any point on or inside the production possibilities

frontier, but not outside the frontier.

Production is efficient if the economy is producing at a point

on the production possibilities frontier.

Microeconomics is the study of

how individual households and firms make decisions.

Macroeconomics is the study of

economy-wide phenomena

Which of the following is not a positive statement?

Equity is more important than efficiency.

positive statement

Higher gasoline prices will reduce gasoline consumption.

Trade restrictions lower our standard of living.

If a nation wants to avoid inflation, it will restrict the growth rate of the

quantity of money.

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