Chapter 2 Flashcards
PPF (Possibilities Frontier)
A curve showing the maximum attainable combinations of two goods using the same amount of resources and technology
Economic growth
when the economy produces increasing quantities of goods and services
Trade
Buying and selling
Comparative advantage
being able to produce competitors at a lower opportunity cost
Absolute advantage
Being able to produce more than competitors using the same amount of resources
Factor markets
For factor production like labor, capital, natural resources
Factors of production
Labor, capital, natural resources to make goods and services
Circular-flow diagram
A model that shows how participants in markets are linked
Increasing marginal opportunity cost
increasing the production of a good requires larger and larger decreases in the production of another good
Product market
a market for goods like computers and services like medical treatment
Property rights
Individuals or businesses has the right to their own property and they can buy or sell
Entrepreneur
Someone who operates a business
