Term
|
Definition
| a situation in which unlimited wants exceed the limited resources available to fulfill those wants. |
|
|
Term
| production possibilities frontier (PPF) |
|
Definition
| a curve showing the maximum attainable combinations of two goods that can be produced with available resources and current technology. |
|
|
Term
| Is the PPF a positive or normative tool? |
|
Definition
| Positive; it shows “what is”, not “what should be”. |
|
|
Term
| Points below the curve are... |
|
Definition
|
|
Term
| Points above the curve are... |
|
Definition
| unattainable with current resources. |
|
|
Term
|
Definition
| The highest-valued alternative that must be given up to engage in an activity. |
|
|
Term
|
Definition
| the ability of the economy to increase the production of goods and services. |
|
|
Term
|
Definition
| The act of buying and selling |
|
|
Term
|
Definition
| The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources. |
|
|
Term
|
Definition
| The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. |
|
|
Term
|
Definition
| a group of buyers and sellers of a good or service, and the institution or arrangement by which they come together to trade. |
|
|
Term
|
Definition
| labor, capital, natural resources, and other inputs used to make goods and services. |
|
|
Term
|
Definition
| Households receive payments for these factors by selling them to firms |
|
|
Term
|
Definition
| Firms supply goods and services to; households buy these products from the firms. |
|
|
Term
|
Definition
| A model that illustrates how participants in markets are linked. |
|
|
Term
|
Definition
No government
No financial system
No foreign buyers and sellers of goods |
|
|
Term
|
Definition
| one 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. |
|
|
Term
|
Definition
| the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it |
|
|
