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14 Cards in this Set
- Front
- Back
Scarcity
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The situation in which unlimited wants exceed the limited resources available to fulfill those wants.
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Production Possibilities Frontier
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A curve showing the maximum attainable combinations of two products that may be produced with available resources.
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Opportunity Cost
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The highest valued alternative that must be given up to engage in an activity.
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Economic Growth
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The ability of the economy to produce increasing quantities of goods and services.
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Trade
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The act of buying or selling.
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Absolute Advantage
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The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources.
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Comparative Advantage
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The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than other producers.
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Market
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A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
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Product Markets
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Markets for goods—such as computers—and services—such as medical treatment.
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Factor Markets
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Markets for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability.
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Circular-Flow Diagram
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A model that illustrates how participants in markets are linked.
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Free Market
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A market with few government restrictions on how a good or service can be produced or sold, or on how a factor of production can be employed.
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Entrepreneur
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Someone who operates a business, bringing together the factors of production—labor, capital, and natural resources—to produce goods and services.
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Property Rights
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The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it.
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