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6 Cards in this Set
- Front
- Back
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Production Possibilities |
the possible combination of two goods that can be produced in a certain period of time under the conditions of a given state if technology and fully employed resources. |
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Law of Increasing Opportunity Cost |
as more of a good is produced, the opportunity costs of producing that good increase. |
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Productive Efficient |
the condition where the maximum output is produced with the given resources and technology |
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Productive Inefficient |
the condition where less than the maximum output is produced with the given resources and technology. Productive inefficiency implies that more of one good can be produced without any less of another being produced. |
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Technology |
The body of skills and knowledge involved in the use of resources in production. An advance in technology commonly increases the ability to produce more output with a fixed amount of resources or the ability to produce the same output with fewer resources. |
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Comparative Advantage |
The situation where someone can produce a good at lower opportunity cost than someone else. |
