DEFINITIONS

There has been a sustained progression of humankind's wellbeing since the industrial revolution. This is measured by standards of living, child mortality, income per capita and a number of other useful statistics. This has come about as a result of specialization and trade.

Specialization (division of labor): a system of organizing the manufacture of an article in a series of separate specialized operations, each of whichis carried out by a different worker or group of workers. Simply put, having people do different parts of something and having it all come together in a faster and more efficient way than if everybody did all parts of something.

Trade: Essentially, to exchange (something) for something else, typically as a commercial transaction. Nowadays, this involves the buying and selling of goods.

Production possibilities frontier (PPF): A graph that shows the combination of two goods being produced. In addition, it illustrates the trade off between producing different quantities of these goods.

Absolute advantage: refers to the ability of a party (an individual, or firm, or country) to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Comparative advantage: The ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals. A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins.

	Erstellt von 2015jtw vor etwa 9 Jahre

This is the second video on the crash course economics program. It's about specialization or division of labor and int'l trade and it's impacts on the world and people.