Micro vocab

Question 1

define comparative advantage

Answer 1

if a country has an absolute advantage in producing both goods, it should specialize in the good with the lowest opportunity cost and trade for other goods. This way, both trading countries can benefit

Question 2

specialization

Answer 2

process of concentrating on a task or activity in order to become expert in it

Question 3

division of labour

Answer 3

process where production procedure is broken down into a sequence of stages and workers are assigned particular procedure