Title: chapter 4 Flashcards | Quizlet
Headings: chapter 4
chapter 4
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Content: 2. It increases the quantity and variety of goods. 3. it lowers the costs of goods. wealth
economist define wealth as the total velue of all things a person owns. How does Specialization lead to economic interdependence? When people specialize, the resulting divisions of labor increase productivity. However those who specialize must trade to obtain what they do not make themselves. This trade gives rise to economic interdependence, as people come to depend on one another for goods and services. How do people and nations gain from specialization and trade
The principle of comparative advantage is what enables producers to gain from specialization and trade.