Ch. 2 Trade-offs, Comparative Advantage, and the Market System
Terms in this set (6)
A situation in which unlimited wants exceed the limited resources available to fulfill those wants.
Productions Possibilities Frontier (PPF)
A curve showing the maximum attainable combinations of two goods that can be produced with available resources and current technology.
- positive shows "WHAT IS"- what economist use
- normative shows "WHAT SHOULD BE"
The ability of the economy to increase the production of the goods and services.
The act of buying and selling.
The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources.
The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.
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