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8 Cards in this Set
- Front
- Back
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Production Possibilities Frontier (PPF) |
The boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced given the available factors of production and the state of technology |
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Production Efficiency |
Situation in which we cannot produce more of one good without undergoing a trade-off, sacrificing another good.
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Allocative Efficiency |
Producing what society wants. |
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Trade-offs |
An exchange, giving up one things to get something else. |
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"Free Lunch" |
Situation where someone can obtain something with no sacrifices involved. |
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Economic Growth |
Sustained expansion of production possibilities. Economy grows when we develop better technologies for producing goods and services; improves quality of labor or increases quantity of capital |
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Absolute Advantage |
Offering goods or services at a lower actual cost than all others |
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Comparative Advantage |
Offering goods and services at a lower opportunity cost than all others |
