Chapter 2 Flashcards

1
Q

PPF (Possibilities Frontier)

A

A curve showing the maximum attainable combinations of two goods using the same amount of resources and technology

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2
Q

Economic growth

A

when the economy produces increasing quantities of goods and services

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3
Q

Trade

A

Buying and selling

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4
Q

Comparative advantage

A

being able to produce competitors at a lower opportunity cost

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5
Q

Absolute advantage

A

Being able to produce more than competitors using the same amount of resources

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6
Q

Factor markets

A

For factor production like labor, capital, natural resources

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7
Q

Factors of production

A

Labor, capital, natural resources to make goods and services

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8
Q

Circular-flow diagram

A

A model that shows how participants in markets are linked

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9
Q

Increasing marginal opportunity cost

A

increasing the production of a good requires larger and larger decreases in the production of another good

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10
Q

Product market

A

a market for goods like computers and services like medical treatment

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11
Q

Property rights

A

Individuals or businesses has the right to their own property and they can buy or sell

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12
Q

Entrepreneur

A

Someone who operates a business

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