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Definition
| The value of the best alternative forgone when an item or activity is chosen. |
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| A cost that has already been incurred, cannot be recovered, and thus is irrelevant for present and future economic decisions. |
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| law of comparative advantage |
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Definition
| the individual, firm, region, or country with the lowest opportunity cost of producing a particular good should specialize in that good. |
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Definition
| The ability to make something using fewer resources than other producers use. |
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Definition
| The ability to make something at a lower opportunity cost than other producers face. |
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Definition
| The direct exchange of one good for another without using money. |
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Definition
| Breaking down the production of a good into separate tasks. |
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Definition
| Focusing work effort on a particular product or a single task. |
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Term
| production possibilities frontier (PPF) |
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Definition
| A curve showing alternative combinations of goods that can be produced when available resources are used efficiently; a boundary line between inefficient and unattainable combinations. |
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Term
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Definition
| the condition that exists when there is no way resources can be reallocated to increase the production of one good without decreasing the production of another, getting the most from available resources. |
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Term
| law of increasing opportunity cost |
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Definition
| to produce more of one good, a successively larger amount of of the other good must be sacrificed. |
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Term
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Definition
| an increase in the economic's ability to produce goods and services; reflected by an outward shift of the economy's production possibilities frontier. |
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Term
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Definition
| the formal and informal institutions that support the economy- laws, customs, manners, conventions and other institutional underpinnings that encourage people to pursue productive activity. |
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Term
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Definition
| the set of mechanisms and institutions that resolve the what, how and for whom questions. |
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Term
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Definition
| an economic system characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets. |
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Term
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Definition
| an owner's right to use, rent or sell resources or property . |
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Term
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Definition
| an economic system characterized by the public ownership of resources and centralized planning. |
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Term
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Definition
| an economic system characterized by the private ownership of some resources and the public ownership of other resources; some markets are regulated by government. |
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