Econ-7.1 Formative Assessment- Option 1

flowers; wheat

wheat; flowers

wheat; wheat

flowers; flowers

just enough of those goods/service for their own needs and wants.

more of these goods/services than they want or need.

far less of these goods/services than they want or need.

an unknown amount of these goods and services because there is no connection to specailization and the amount of a good or service produced.

Sweden has a lower opportunity cost in producing stainless steel as compared to Finland.

Finland has a lower opportunity cost in producing stainless steel as compared to Sweden.

 Finland should specialize in the production of a good or service other than stainless steel.

To make trade between Sweden and Finland to be as efficient as possible, Sweden should let Finland specialize in the production of stainless steel and Sweden should specialize in producing a different good or service in which it has a comparative advantage over Finland.