Reference no: EM133338549

Questions

1. The key to trade is specialization.

a. Define specialization (look back in Principle in Module 1).

b. Suppose you want to get a job. If you had to specialize, what job would you choose to specialize in and why?

c. What activity or job do you do know that you would definitely choose not to specialize in because you aren't very efficient at it?

2. Define comparative advantage.

3. Define absolute advantage. (Use resources and be specific in your answer.)Describe an example that shows the difference between comparative advantage and absolute advantage. (Hint: good examples can be found in your own work place or at home.)

4. In general, what is for sale in the factor markets? Give an example from your household.

5. In general, who receives money in the markets for goods and services? Give one example.

6. What are the two main indicators that we use to measure how the economy is doing? Define them both.

7. What are the four parts of the business cycle?

8. What is the goal that economists have for prices? Describe an example of a good that you have noticed price changes for over your lifetime.