Chapter 2-econ - Chapter 2 Capital produced themselves then...

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Chapter 2 Capital- produced themselves, then used in the production of other goods and services Ex.) Machines, offices Factors of production(factors)- inputs into the process of production, another word for resources. Production- process that transform scarce resources into useful goods and services. Inputs/Resources- anything provided by nature or previous generation that can be used directly on indirectly to satisfy human wants. Outputs- usable products Scarcity/Choice in a one-person economy - Nearly all the same decisions characterize complex must also be made in a simple economy. Opportunity Cost - concepts constrained choice and scarcity are central to the discipline of economics Theory of Comparative Advantage - Ricardo’s theory that specialization and free trade will benefit all trading parties, even those that may be absolutely more efficient producers. Absolute Advantage - if one company can make the product using fewer resources then the other company.
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