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16 Cards in this Set

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A situation in which unlimited wants exceed the limited resources available to fulfill those wants

Scarcity

A curve showing the maximum attainable combinations of 2 products that may be produced with available resources & current technology

Production possibilities frontier (PPF)

The hughest valued alternative that must be given up to engage in an activity

Opportunity cost

The ability of the economy to increase the production of goods and services

Economic growth

The act of buying and selling

Trade

The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources

Absolute advantage

The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors

Comparative advantage

A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade

Market

A market for goods - such as computers - or services - such as medical treatment

Product market

A market for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability

Factor Market

The inputs used to make goods and services

Factors of production

In factor markets, households are __ and firms are __

Suppliers; demanders

A model that illustrates how participants in markets are linked

Circular flow diagram

A market with few govt restrictions on how a good or service can be produced or sold or on how a factor of production can be employed

Free market

Someone who operates a business, bringing together the factors of production - labor, capital, and natural resources - to produce goods and services

Entrepreneur

The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it

Property rights