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absolute advantage
The term refers to the ability to make something using fewer resources than other producers use.
PPF
The production possibilities frontier, or , depicts an economy's productive capacity when all resources are utilized efficiently.
Opportunity cost
depends on your alternatives.
time consuming
Because learning about alternatives is expensive and , some decisions are made on the basis of incomplete or even incorrect information.
law of comparative advantage
According to the , the person who has the lowest opportunity cost of creating a certain item should specialize in that good.
Comparative advantage
focuses on what else those resources could generate- that is, on the opportunity cost of those resources.
PPF
The can migrate in and out of play over time as a result of changes in resource availability, technology, or game regulations.
comparative advantage
Most individuals eat just a small portion of what they produce and generate only a small portion of what they consume due to specialization and .
Comparative advantage
is a superior criterion for determining who should do what.
Sunk cost
A cost that has already been incurred, cannot be recovered, and thus is irrelevant for present and future economic decisions
Opportunity cost
value of the best alternative is forgone when an item or activity is chosen
law of comparative advantage
According to the , the person who has the lowest opportunity cost of creating a certain item should specialize in that good.