Specialization & Trade

How does the Organization of the Petroleum Exporting Countries (OPEC) achieve its goal of stabilizing the worldwide price for oil?

• by setting member production quotas to lower the overall supply of oil

• by purchasing most of the oil available on the market from nonmembers

• by using its vote on the United Nations Security Council to set acceptable prices

• by arranging exclusive contracts with private and nationalized oil companies

What answer choice describes economic specialization?

• An economy in which producers

  look to the past in order to answer the three basic economic questions.

• An economy in which producers produce the goods they can create most efficiently and trade for others.

• An economy in which all economic barriers to trade have been eliminated.

• An economy in which the government controls the means of production.

Use the chart to answer the question:

Which country might trade its agricultural technology for petroleum? 

• Nigeria
• South Africa
• Saudi Arabia
• Israel

Why are most countries better off specializing in the production of particular goods, and then trading with other nations to obtain whatever else they need? 

• Transportation costs are lower than they were a century ago.
• Resources are not evenly distributed among countries.
• Greater investment of capital goods increases productivity.
• People have limited resources to satisfy unlimited wants. 

Country X can manufacture a particular product better and at a lower cost than country Y can.
What conclusion can be drawn from this situation?

• Country X has solved the problem of scarcity.
• Country X should discontinue making that product.
• Country Y should try to produce the same product. 
• Country X should sell that product to Country Y.

Read the following two statements:
1. Nation A produces cars more efficiently than it can grow food crops.
2. Nation A produces cars and buys food from Nation B.
What principle of economics is illustrated by these two statements?

• Laws of Supply and Demand
• Scarcity
• The Factors of Production
• Specialization

A graphic organizer is shown:
Which would be the best title for this graphic organizer?

• Positive and Negative Effects of a Command Economy
• The Average Cost of Producing Goods and Services
• The Benefits of Specialization and Trade
• Improving the Skills of a Country's Workforce

To focus on producing one thing to improve productivity is known as:

• Specialization
• International trade
• Absolute Advantage
• Supply and Demand

This trade barrier limits the number of products that can be brought into a country.

• Tariff
• Quota
• Embargo
• Subsidy

This is a tax on imports that is used to increase price of foreign products and raise government revenue. 

• tariff
• quota
• subsidy
• embargo