| A | B |
|---|
| Comparative advantage | when one nation produces a product better or cheaper than other nations |
| division of labor | dividing labor into individual tasks in order to increase productivity |
| economies of scale | larger business can operate at a more efficient rate because of its bulk. Also applies when buying items in large quantities |
| opportunity cost | a person loses the chance to do something when you make a choice |
| trade off | deliberately make a decision and while knowing the other options would be lost |
| factors of production | land, labor, capital, enterpreneur |
| capital | money used to start or operate a business |
| capital goods | machines or tools that are used to produce other goods |
| traditional economy | primitive,almost everything is made by hand |
| command economy | the government is in control of the factors of production |
| market economy | individuals make most of the choices |
| mixed economy | individuals and government share economic decisions |
