Lesson2 key terms - group to another. Product and Resource...

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Key Terms and Concepts: Productive Resources The inputs of land, labor, capital, and enterprise that a firm uses to produce outputs. The Basic Economic Question What to produce, how to produce it, and who should get it. These questions are answered by command, tradition, or the market. Functions of Government The functions of government consist of allocation, any activities by government or its agents that affect the distribution of resources and the combination of goods and services produced; stabilization, actions by the government to reduce changes in output, employment, and prices; and redistribution, actions by government that transfer income from one
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Unformatted text preview: group to another. Product and Resource Markets Product markets are markets in which goods and services produced by firms are sold. Resource markets are markets in which owners of productive resources sell these to producers. Comparative Advantage The idea that output will be maximized if people specialize in producing those goods or services for which their opportunity costs are lowest and engage in exchange to obtain other things they want....
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This note was uploaded on 01/13/2012 for the course ECON 2306 taught by Professor Kamara during the Spring '11 term at University of Texas at Austin.

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