Econ MT 1 definitions

Econ MT 1 definitions - Econ-Midterm 1 Definitions...

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Econ-Midterm 1 Definitions Perfectly competitive market: 1. No externalities 2. numerous buyers and sellers 3. homogenous product 4. freedom of entry/exit Rational- if people know what they want and how to get it, they get it Marginal- incremental changes Utitlity- amt of pleasure a person gets Scarsity- quantity is insufficient to satisfy all wants Economic resources- anything that can be used to produce something else Opportunity costs- value of what you give up in order to undertake decisions—value of the next best alternative Economy: system of allocating resources for production and output for consumption Efficiency-outcome in which goods cannot be redistributed to make someone better off w/o harming someone else Absolute Advantage: a resource has AA if it produces that good with the lowest resource cost Comparative advantage: A resource has CA if it produces that good with the lowest opportunity cost. Production possibilities frontier: graph of efficient combinations of outputs that can be
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This note was uploaded on 04/07/2008 for the course ECON 1102 taught by Professor Someguy during the Spring '07 term at Minnesota.

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Econ MT 1 definitions - Econ-Midterm 1 Definitions...

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