Comparative Advantage

No

Does a market economy provide everyone with adequate amounts of food, shelter and healthcare?

by costs and profits

How are production methods determined?

No, some firms have the power to distort prices without adequate information producers don't always disclaim all information. The can misrepresented to trick those that don't pay much attention

Is the information provided to consumers typically accurate?

availability

Prices communicate information about _____ of products to consumers

what goods to produce and the distribution of output to society not always fair

What are the 2 main things a market economy is in charge of?

what is to be produced how are these goods produced for whom are the goods produced

What are the questions we ask in regards to scarcity?

allows them to allocate scarce resources through their actions in the market place

What does a market economy do for suppliers and consumers

USA is better at producing wheat while brazil is better at producing coffee. Therefore, the countries trade with each other so they can focus on creating one quality item

What is a good example of comparative advantage?

comparative advantage = which country loses less

What is good way to remember what comparative advantage is

goods are distributed equally

Who are the goods produced for? - Command Economy

the person's income

Who are the goods produced for? - Market economy -the amount of output receivable depends on ________

necessary survival

Who are the goods produced for? - Mixed Economy Goods for ____ are distributed in many different ways. Most people have access to them

specialization

concentrate energy on only one or a few activities allows for best use of limited resources

scarce/more expensive resources; abundant resources

each nation tends to use the production process that best conserves ____________ and use more ______________

property rights

give individuals the incentive to use their property efficiently

mixed economics

government and private sectors together determine allocation of resources

consumer sovereignty

how individual consumers in market economics determine what is to be produced

disappears

in a market economy, supply will _____ if there is no demand. If supply does this, it does not mean there is no demand.

prospect of wealth

increasing exchange that leads to productive specialization

comparative advantage

one person/region/country can produce a good or service at a lower opportunity cost than others

market economy

private individuals and firms own most of the resources

command economy

production decisions are determined by a government official/committee/central planning organization

trade/voluntary trade

this interaction between markets or countries directly increases wealth by making both parties better off

labor intensive methods

used where capital goods are relatively scarce

capital intensive methods

used where labor is relatively scarce

-employees acquire greater skill from repetition -avoid wasted time in shifting from one task to another -do the types of work for which they are best suited

what are some advantages to specialization?

production schedules

what we use to determine who has comparative advantage

absolute advantage

who can produce more of one good