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Flashcards in Chapter 3 Deck (17)
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1
Q

What is labor?

A

Human physical and mental effort used in the production of goods and service.

2
Q

What is capital?

A

A good produced to be used for other goods and service.

3
Q

What is land?

A

Natural resources / anything not man made

4
Q

What is financial capital?

A

Money and other paper assets used in the production of gets.

5
Q

What is technology?

A

machinery and equipment developed from the application of scientific knowledge.
something that helps the production process

6
Q

What is an Entrepreneurship?

A

The ability to put together all the other factors of production?

7
Q

What is the production possibility model?

A

A graph representing production tradeoffs of an economy given fixed resources and technology

8
Q

What is production possibility curve?

A

This is a graphical representation of the PPA. It shows graphically the maximum combination of any two goods that a country or firm can produce using all the available resources and technology.

9
Q

How do you find the opportunity cost?

A

giving up / trying to get = oppertunity

10
Q

What is the opportunity cost of production?

A

This refers to giving up one good to produce another good

11
Q

What is comparative advantage?

A

This refers to the ability of a firm or a country to produce at the lower opportunity cost compared to competitors

12
Q

What is absolute advantage?

A

The ability to produce more of a good or service with the same amount of resources as competitors (deciding which company should produce what)

13
Q

What is the law of increasing opportunity?

A

As more and more of a good is produced the opportunity cost of producing that good increases.

14
Q

What does movement along the PPC mean?

A

This refers to the concept of trade increase in the production of one god leading to decrease in the production of another good because resources are limited or scares

15
Q

What is full employment?

A

A situation where all the resources available from production are for/ used in the production process

16
Q

What is inefficient production?

A

This refers to a situation where a firm is operating using all its resources but it is operating inside the PPC.

17
Q

What is economic growth?

A

This is a process through which an economy achieves an outward shift in the PPC