Econ 1 goods

Opportunity cost

Value of the next best alternatives given up when making a choice (what you give up when you make a choice)

Trade off

All of the alternatives choice in favor of what you select

Production Possibility Curve (PPC)

Diagram showing different positive combinations of 2 goods that can be produced using available resources

Way to illustrate opportunity cost

Economic growth

When a nation’s total output of goods and services increase overtime

Measured by:

Shifts in PPC which can occur because of:
Change in tech, increase/decrease in resources, more/less efficient use of resources, specialization, natural disaster, and population growth

Productivity

Measurement of amount of Goods and Services product with a given amount of resources in a given period of time

Productivity increase when able to make more with same amount of resources

Productivity decreases when make less with same amount of resources 

Division of Labor

Way of organizing work so each worker or group completes one part of an overall task

Ex. Ford assembly line

Specialization

When a FOP performs only tasks that they can do better or more efficiently than others.

Gross Domestic Product (GDP)

Monetary value of all economic products produced in a given period 

Nominal GDP

Output measured using actual prices from that year.

Real GDP

Output measured using a base price to adjust for inflation

GDP Growth rate

% Change from 1 time to another in real GDP (usually in quarters)

GDP leaves out

Black market, volunteering, non-market transaction, 2nd hand sales, income equality, environment impact, quality of life.

Absolute advantage

When a country can produce more of a product with the same amount of resources

Comparrative advatnage

ability of a country to produce a product at a lower opportunity cost

Allows countries to focus on producing products they are best at making-making an efficient use of society’s resources

Things that give comparative advantage:

• Natural resources

• Educated workers

• Cheap labor

• Few environment regulations
  

Import 

Products produced in foreign country and brough into a country to be consumed 

Export

Products produced in a country and sold to a foreign nation

Protectionism

Any form of trade barrier, usually to protect industries

Embargo, quotas, taiffs

Tariff

Tax on imported goods, paid by companies importing the product

Free trade 

When products are traded between countries without any barrier

Allow companies to utilize comparative advantage 

Free trade agreement (FTA)

agreements between countries to reduce trade barriers and increase trade 

NAFTA (North America Free Trade Agreement 

Goal to reduce tariffs and quotas (trade barriers) between U.S, Mexico, and Canda 

USMCA (2020) re-negotiated NAFTA

WTO (World Trade Organization) 

Place to organize/regulate trade, resolve disagreement