Term
| PPF (Production Possibility Frontier) |
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Definition
curve showing max attainable combinations of two products that may be produced w available resources and current technology
- inside/on frontier = attainable
- inside = inefficient
- on = efficiency
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Term
| moving down your PPF can result from |
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Definition
increasing marginal opporunity cost
- some workers and machines are more suitable for one task than another |
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Term
| the more resources already devoted to an activity... |
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Definition
| the smaller the payoff devoting additional resources to that activity |
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Term
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Definition
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Term
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Definition
| is the ability for an individual, firm, or country to produce more goods than competitor w same resources |
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Term
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Definition
the ability for an individual, firm, or country to produce a good or service at a lower opporunity cost than competitors
*this is why trade works = even if she has a aa over you, she has a higher oc, means loss! |
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Term
| product markets vs factor markets |
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Definition
pm = goods
fm = factors of production (labor, capital, natural resources, entreprenuer) |
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Term
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Definition
scottish modern father of economics
- the guild system in europe; smith says this restricted income, wealth, etc and that prices would do a better job bc individuals are rational/ self interested "invisible hand" |
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Term
| why are property rights important |
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Definition
(intellectual property rights, patents)
- bc protects and encourages entreprenurs for research, etc
- why economic growth is hard in corrupted economies (will never rise out of PPF) |
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