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Definition
| the value of the best alternative forgone when an item or activity is chosen. |
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| a cost that has already been incurred in the past, cannot be recovered, and thus is irrelevant for present and future economic decisions. |
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Term
| Law of Comparative Advantage |
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Definition
| the individual, firm, region, or country with the lowest opportunity cost of producing a particular good should specialize in that good. |
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Definition
| that ability to make something at a lower opportunity cost than other producers use. |
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Definition
| the ability to make something at a lower opportunity cost than other producers face. |
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Term
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Definition
| the direct exchange of one good for another without using money. |
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Definition
| breaking down the production of a good into separate tasks, |
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Term
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Definition
| focusing work effort on a particular product or a single task. |
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Term
| Production Possibilities Frontier (PPF) |
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Definition
| a curve showing the alternative combinations of goods that can be produced when available resources are used efficiently; a boundary line between inefficient and unattainable combinations. |
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Term
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Definition
| the condition that exists when there is no way resources can be reallocated to increase the production of one good without decreasing the production of another; getting the most from available resources |
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Term
| Law of Increasing Opportunity Cost |
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Definition
| to produce more of one good, a successively larger amount of the other good must be sacrificed. |
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Term
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Definition
| an increase in the economy's ability to produce goods and services; reflected by an outward shift of the economy's production possibilities frontier. |
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Term
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Definition
| the set of mechanisms and institutions that resolve the what, how, and for whom questions. |
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Term
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Definition
| an economic system characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets. |
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Term
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Definition
| an owner's right to use, rent, or sell resources or property. |
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Term
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Definition
| an economic system characterized by the public ownership of resources and centralized planning. |
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Term
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Definition
| an economic system characterized by the private ownership of some resources and the public ownership of other resources; some markets and regulated by government. |
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