13 terms

Chapter 3

Chapter 3 vocabulary from Contemporary's Economics by Matthew T. Downey
Someone who changes natural resources, labor, and capital resources into goods and services
Someone who buys and uses goods and services
circular flow model
A model that shows how a market economy organizes the production and consumption of goods and services
factor market
A market in which the factors of production are bought and sold
product market
A market in which individuals use the money they received by selling goods and services in the factor markets to make their purchases
production possibilities curve
A model that shows the maximum amount of goods or services that can be produced from a fixed amount of resources in a specific time period
The public goods that are needed to support a population like roads, sewers, buildings, and power plants
The amount of goods and services that a worker can produce in a specific amount of time
The concentration on the production of a few goods and services
absolute advantage
The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources
comparative advantage
The ability to produce a good at a lower opportunity cost than another producer
law of comparative advantage
The individual, firm, region, or country with the lowest opportunity cost of producing a particular good should specialize in that good
A relationship between countries or other entities in which they rely on one another for resources, goods, or services