Definitions for chapter 3

Definitions for chapter 3 - those that people value most...

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Definitions The Economic Problem Chapter 3 Production possibilities frontier- The boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. Production efficiency- A situation in which we cannot produce more of one good or service without producing less or something else Tradeoff- An exchange—giving up one thing to get something else Free lunch- A gift—getting something without giving up something else Allocative efficiency- A situation in which the quantities of goods and services produced are
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Unformatted text preview: those that people value most highlyit is not possible to produce more of a good or service without giving up some of another good that people value more highly Economic growth-The sustained expansion of production possibilities Comparative advantage-The ability of a person to perform an activity or produce a good or service at a lower opportunity cost then someone else Absolute advantage-When one person is more production than another person in several or even all activities...
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This note was uploaded on 04/17/2008 for the course ECON 201 taught by Professor Dr.sharma during the Spring '08 term at Ohio State.

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