microecon 1

output problem format

other / current

input problem format

current / other

output absolute advantage

higher number

input absolute advantage

lower number

Comparative advantage

always looking for the lower opportunity cost

Scarcity

Resources are limited, but human wants are unlimited

market economy

Individuals and businesses make economic decisions through supply and demand

Command economy

The government makes major economic decisions and allocate resources

Private ownership

A characteristic of market economy

Price system

Uses supply and demand to allocate resources in a market economy

Point on the ppc

Resources are being used efficiently

Point inside the ppc

Resources are being used inefficiently

Point outside the ppc

Currently unattainable

movement along a ppc

Shows tradeoffs society faces

Property rights

The right to own and control resources/property and is more associated with market economy