Economic growth
a sustained rise in aggregate output and an increase in standard of living (causes are developments in technology, or an increase in resources)
Scarcity
unlimited wants, limited resources (example: land)
PPC
If the ________ is linear, it has a constant opportunity cost, if it is curved, it has increasing opportunity costs.
allocate resources
The economy has to decide what goods and services the society needs in order to properly ________.
Opportunity costs
This is the cost we forgo or sacrifice, to opt for another choice.
Microeconomics
filters our scope to individuals in an economy while keeping the overall economy in mind
Land
natural resources and raw material
Labor
physical labor, skills, and effort devoted into a task where workers are paid
Capital
is usually referred to as the liquid asset, or monetary value
Physical capital
tools and equipment used to produce a good or service
Human capital
education and training an individual has that is used in the production of a good or service
Trade-offs
The alternative choice which must be given up in order to make a decision
Opportunity costs
This is the cost we forgo or sacrifice, to opt for another choice
Economic growth
a sustained rise in aggregate output and an increase in standard of living (causes are developments in technology, or an increase in resources)
Productive efficiency
lowest cost possible on the PPC
Allocative efficiency
the economy allocates resources so consumers are well off as possible, producing what is demanded
Absolute Advantage
Occurs when a firm as the ability to produce a specific amount of goods or services in comparison to the others
Comparative Advantage
The ability of a firm to produce a good or service at the lowest possible cost
Terms of Trade
people split up the work, and provide each other with a good in return for another
Capital goods
goods that make consumer goods (resources better for economy)
Consumer goods
goods that are consumed
Implicit costs
monetary or non-monetary opportunity costs in terms of making a choice
Explicit costs
traditional out of pocket costs which are associated with choosing one course of action