Econ. Chapter 4 Vocab.

Specialization

________, an approach to production in which individual workers become highly skilled at a specific task.

The development of skills or knowledge in one aspect of a job or field of interest. People who specialize become expert in a particular activity.

Division of labor

________ that arises from specialization. It also underscores the great efficiency and productivity that result when workers divide the individual tasks that make up a job and become expert at those specific tasks.

The allocation of separate tasks to different people. Based on the principle of specialization.

Voluntary exchange

Trade is a ________ in which both parties give up something in order to get something else they want.

The act of willingly trading one item or service for another. Both parties expect to gain from it.

Barter

________, the direct exchange of one good or service for another.

^Without the use of money. Typical in traditional economies.

Coincidence of wants

________ -- that is, when "you have something I want and I have something you want."

Money

________ is a medium of exchange that can be traded for goods or services or used to pay debts.

Critical in a market economy.

Economic interdependence

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

Trade barriers

_________, which included tariffs and other measures to limit interstate trade, were designed to protect local industry and promote self-sufficiency.

Commerce Clause

________, states, "Congress shall have power... to regulate Commerce with foreign Nations, and among the several states." This empowers the national government to promote trade and economic interdependence among the states.

Absolute advantage

He is younger, stronger, and better at almost everything, including gathering turnips and digging clams. As a result, he enjoys an ________ in food production.

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

Comparative advantage

________ is defined as the ability to perform a task at a lower opportunity cost than someone else is able to perform that task.

Wealth

Most people define ________ as money and the things money can buy. The total value of all the things a person owns. This can be measured in other ways not just dollars and cents.

Mass production

Larger markets, in turn, allow producers to take advantage of the savings that come with _______, or large-scale manufacturing.

EX: A company that produces thousands of loaves of bread each day might be able to buy its flour at a much lower cost than could a small neighborhood bakery.