AP Microeconomics Unit 1 - Resource Allocation and Economic Systems + Production Possibility Curve (PPC)

Property Rights

Who owns what and what they do with that

Price Signal

Allows more of products with more demand to be produced more

Ceteris Partibus

assuming all other things/variables are the same/equal

Production Possibilities Curve (PPC)

A graph showing the relationship between obtaining one item in relation to another

Production Possibilities Frontier (PFF)

Part of PPC which represents going from one scenario to the next

Opportunity Cost

Tradeoff for obtaining one product over another

Marginal Cost

What is lost in opportunity cost

Marginal Opportunity Cost

Cost of producing one more unit of a good or service in terms of the quantity of another good or service that must be forgone

Constant Opportunity Cost Graph

Linear graph w downward slope

Increasing Opportunity Cost Graph

Bow shaped graph w downward slope

Decreasing Opportunity Cost Graph

Graph that curves inwards w a downward slope