ECON 3100 TRAINING STUDY SHEET 2026
UPDATED QUESTIONS AND ANSWERS
◉absolute productivity advantage . Answer: A country has this in a
good if its labor productivity is higher; this is, it is able to produce
more output with an hour of labor than its trading partner can
◉autarky . Answer: the complete absence of foreign trade; total self-
sufficiency of a national economy
◉comparative productivity advantage . Answer: achieved in a good
when a country has lower opportunity costs of producing the good
than those of its trading partners
◉competitive advantage . Answer: The ability to sell a good at the
lowest price. This may be the result of high productivity and a
comparative advantage.
◉consumption possibilities curve (CPC) . Answer: Shows the ratio at
which goods can be exchanged when trade occurs. The slope is the
trade price of one good in terms of another.
, ◉economic restructuring . Answer: a movement from one point to
another along a country's production possibility curve
◉gains from trade . Answer: the increase in consumption made
possible by specialization and trade
◉labor productivity . Answer: the amount of output per unit of labor
input
◉mercantilism . Answer: The economic system that arose in
western Europe in the 1500s, during the period in which modern
nation states were emerging from fuedal monarchies. This term has
been called the politics and economics of nation building because it
stressed the need for nations to run trade surpluses to obtain
revenues for armies and national construction projects. Those that
favored this also favored granting monopoly rights to individuals
and companies, they shunned competition, and they viewed exports
as positive and imports as negative.
◉opportunity cost . Answer: the value of the best forgone
alternative to the activity actually chosen
◉production possibilities curve (PPC) . Answer: This curve shows
the maximum amount of output possible, given the available supply
of inputs. It also shows the trade-off that a country must make if it
wishes to increase the output of one of its goods.
UPDATED QUESTIONS AND ANSWERS
◉absolute productivity advantage . Answer: A country has this in a
good if its labor productivity is higher; this is, it is able to produce
more output with an hour of labor than its trading partner can
◉autarky . Answer: the complete absence of foreign trade; total self-
sufficiency of a national economy
◉comparative productivity advantage . Answer: achieved in a good
when a country has lower opportunity costs of producing the good
than those of its trading partners
◉competitive advantage . Answer: The ability to sell a good at the
lowest price. This may be the result of high productivity and a
comparative advantage.
◉consumption possibilities curve (CPC) . Answer: Shows the ratio at
which goods can be exchanged when trade occurs. The slope is the
trade price of one good in terms of another.
, ◉economic restructuring . Answer: a movement from one point to
another along a country's production possibility curve
◉gains from trade . Answer: the increase in consumption made
possible by specialization and trade
◉labor productivity . Answer: the amount of output per unit of labor
input
◉mercantilism . Answer: The economic system that arose in
western Europe in the 1500s, during the period in which modern
nation states were emerging from fuedal monarchies. This term has
been called the politics and economics of nation building because it
stressed the need for nations to run trade surpluses to obtain
revenues for armies and national construction projects. Those that
favored this also favored granting monopoly rights to individuals
and companies, they shunned competition, and they viewed exports
as positive and imports as negative.
◉opportunity cost . Answer: the value of the best forgone
alternative to the activity actually chosen
◉production possibilities curve (PPC) . Answer: This curve shows
the maximum amount of output possible, given the available supply
of inputs. It also shows the trade-off that a country must make if it
wishes to increase the output of one of its goods.
