Specialization and Exchange - Chapter 2 vocab

**production possibilities frontier (PPF)**

a line or curve that shows all the possible combinations of two outputs that can be produced using all available resources

**efficient points**

combinations of production possibilities that squeeze the most output possible from all available resources

**absolute advantage**

the ability to produce more of a good or service than others can with a given amount of resources

**comparative advantage**

the ability to produce a good or service at a lower opportunity cost than others

**specialization**

spending all of your time producing a particular good

**gains from trade**

the improvement in outcomes that occurs when producers specialize and exchange goods and services