Specialization

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

The allocation of separate tasks to different people.  Division of labor in the production of a good or service is based on the principle of specialization.

Voluntary Exchange

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

Barter

The direct exchange of goods or services without the use of money.  Barter is typical in traditional economies.

Money

A generally accepted medium of exchange that can be traded for goods and services or used to pay debts.  Money is critical in a market economy.

Economic Interdependence

The characteristic of a society in which people rely on others for most of the goods and services they want.  This interdependence results from specialization and trade.

Absolute Advantage

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

Comparative Advantage

The condition that exists when someone can produce a good or service at a lower opportunity cost than someone else.

Coincidence of Wants

"You have something I want, and I have something you want".

Trade Barriers

Designed to protect local industries and promote trade self-sufficiency.

Commerce Clause

Article I Section 8 of the Constitution empowers the national government to promote trade and economic interdependence among the states.

Wealth

The total value of all the things a person owns.

Mass Production

Large scale manufacturing