Supply and Demand
explain the concept of supply
the amount of one thing ready for consumption
what is command economy generally referred to as
Communism
why is trade important
you can get things you could not on your own
Explain Comparative Advantage
you have the comparative advantage when you can produce something with less cost
explain the concept of demand
the amount of something that consumers want
give me an example of a command economy (can be historical)
Soviet Union, Vietnam, North Korea etc...
explain what it means to barter
to trade without the use of money
explain opportunity cost
the loss of potential gain from other alternatives when one alternative is chosen.
if there are lots of one thing in the market, what will happen to its price, why?
the price will go down since there's a lot of it to go around
what is the role of the government in command economies
the government makes almost all the decisions
why would specialization be beneficial
the making of that one thing would be fantastic
why would Apple have the comparative advantage to phone making against you
you don't have a whole factory for it
explain why gold is valuable
in theory, why are command economies less effective
they do not rely on market forces to determine production
why is trade beneficial to nations and countries
other countries might have things that we do not and vice versa
explain why the comparative advantage is important
whoever has the comparative advantage can produce their product more effectively and potentially sell more
what is the role of supply and demand in the economy
supply and demand decide how the economy grows and by how much
what is a big problem with command economies
variable, government might guess wrong on the need for one thing
how does specialization contribute to trade
specialization means you would have to go find someone else for your needs, someone that specializes in that need