Macro Ch.2

Front 1

absolute advantage

Back 1

one person has an absolute advantage over another if he or she takes fewer hours to perform a task than the other person

Front 2

comparative advantage

Back 2

one person has a comparative advantage over another if his or her opportunity cost of performing a task is lower than the other person's opportunity cost

Front 3

production possibilities curve

Back 3

a graph that describes the maximum amount of one good that can eb produced for every possible level of production of the other good

Front 4

attainable point

Back 4

any combination of goods that can be produced using currently available resources (the points that lie on or within the curve)

Front 5

unattainable point

Back 5

any combination of goods that cannot be produced using currently available resources (the points that lie outside the production possibilities curve)

Front 6

inefficient point

Back 6

any combination of goods for which currently available resources enable an increase in the production of one good without a reduction in the production of the other (the points that lie within the curve)

Front 7

efficient point

Back 7

any combination of goods for which currently available resources do not allow an increase in the production of one good without a reduction in the production of the other (the points that lie along the curve)