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property rights
the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it
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entrepreneur
someone who operates a business, bringing together the factors of production to produce goods and services
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free market
a market 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
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circular-flow diagram
a model that illustrates how participants in markets are linked
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factors of production
the inputs used to ake goods and services
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factor markets
markets for the factors of production, such as labour, capital, natural resources, and entreprenuerial ability
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product markets
markets for goods and services
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market
a group of buyers and sellers of a good or service and the institution or arrangement by which the come together to trade
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comparative advantage
the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors
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absolute advantage
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
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economic growth
the ability of the economy to increase the production of goods and services
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opportunity cost
the highest valued alternative that must be given up to engage in an activity
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PPF
a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology
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scarcity
a situation in which wants exceed the limited resources available to fulfill those wants.
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