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SS Chapter 4
Gains from Trade
14
Economics
9th Grade
02/24/2009

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Term
specialization
Definition
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. 
Term
division of labor
Definition
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.
Term
voluntary exchange
Definition
The act of willingly trading one item or service for another.  Both parties in a voluntary exchange expect to gain from it.
Term
barter
Definition
The direct exchange of goods or services without the use of money.  Barter is typical in traditional economies.
Term
money
Definition
A generally accepted medium of exchange that can be traded for goods and services or used to pay debts.  Money is critcal in a market economy. 
Term
economic interdependence
Definition
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.
Term
absolute advantage
Definition
The condition that exists when someone can produce a good or service using fewer resources than someone else.
Term
comparative advantage
Definition
The condition that exists when someone else can produce a good or service at a lower opportunity cost than someone else.
Term
coincidence of wants
Definition
"You have something I want, and I have something you want."
Term
trade barriers
Definition
designed to protect local industries and promote trade self-sufficiency
Term
trade barriers
Definition
designed to protect local industries and promote trade self-sufficiency
Term
commerce clause
Definition
Article I Section 8 of the constitution empowers the national government to promote trae nad economic interdependence among the states
Term
wealth
Definition
the total value of all the things a person owns
Term
mass production
Definition
large scale manufacturing
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