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11 Cards in this Set

  • Front
  • Back
Opportunity Cost
The highest value alternative that must be forgone when a choice is made
Giving up one good in order to get another
Production Possibility Curve--a graphic representation showing the maximum quantity of goods and services that can be produced using limited resouces to the fullest extent
Marginal Opportunity Costs
The ammount of one good or service that must be given up to obtain one additional unit o fanother good or service
The Law of Increasing Costs
That fact that opportunity cost of additional units of a good generally increases as production of more units in attempted. This why the PPC is bowed out.
When an imput produces the maximum possible output. Or, the situation in which a given output is produced at minimun cost.
Marginal Cost
Cost of one more unit
Marginal Benefit
Additional benefit of one more unit.
Inefficient Point
Not producing to maxmimum potential. (Any point below the PPC.)
Absolute Advantage
Being able to produce more of a good (or at a lower cost) than someone else.
Comparative Advantage
The ability to produce a good or service at a lower opportunity cost (relative cost) than someone else.