Economics 3rd Ed CH2

  1. What is a Production Possiblilty Frontier?
    A curve that shows the maximum attainable combinations of two products that may be produced with available resources.
  2. What is Scarcity?
    A situation in which unlimited wants exceed the limited resources available to fulfill those wants.
  3. What is Opportunity Cost?
    The highest valued alternative that must be given up to engage in that activity.
  4. What is Economic Growth?
    Being able to shift the Porduction Posibilities Frontier outward.
  5. What is Trade?
    The act of buying and selling.
  6. What is a comparative advantage?
    It can produce the good or service at the lowest opportunity cost.
  7. What is absolute advantage?
    Being able to produce more of that good or service from the same amount of resources.
  8. What is a Market?
    A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
  9. What are product markets?
    Markets for goods and services.
  10. What are Factor Markets?
    Markets for the factors of production.
  11. What are the factors of production?
    Labor, capitol, natural resources, and entrepreneurial ability.
  12. What is a circular-flow diagram?
    It shows how participants in product markets and factor markets are linked.
  13. What is a Free Market?
    A market with few government restrictions on how a good and service can be produced or sold or how the factors of production can be employed.
  14. What is an entrepreneur?
    Someone who opporates a business
  15. What are property rights?
    The rights of individuals and firms to use their property.
Card Set
Economics 3rd Ed CH2
Vocabulary on Chapter 2