ECON 1002 MICROECONOMICS FINAL EXAM 3 COMPLETE QUESTION BANK AND EXPLANATIONS 2026

ECON 1002 MICROECONOMICS FINAL EXAM
3 COMPLETE QUESTION BANK AND
EXPLANATIONS 2026

◉ Absolute Advantage. Answer: The theory that a person will
specialize in producing the good for which they have the lowest
resource cost.


◉ Comparative Advantage. Answer: A person will specialize in
producing the good for which they have the lowest opportunity cost.


◉ Comparative Advantage, Absolute Advantage. Answer: People
specialize in their _________, not their _____________


◉ Export. Answer: To sell something to a buyer in another country.


◉ Import. Answer: To buy something from a seller in another
country.


◉ Free Trade. Answer: Trade unrestricted by physical force, such as
government intervention or special taxes.

, ◉ American consumers, American producers.. Answer: Exports
harm ____________. Benefit ____________.


◉ American producers, American consumers.. Answer: Imports
harm __________. Benefit ____________.


◉ Trade Barrier. Answer: Any government action that restricts
trade.


◉ Protectionism. Answer: Support for trade barriers


◉ Tariff. Answer: A tax on imports.


◉ Reciprocal Free Trade. Answer: When two or more countries
lower their trade barriers at the same times.


◉ Total Cost. Answer: The cost of producing a certain quantity of
units of a good.


◉ Fixed costs. Answer: Costs that do not vary with the quantity of
units produced.


◉ Variable Costs. Answer: Costs that vary with the quantity of units
produced.