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Comparative Advantage
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The situation where someone can produce a good at lower opportunity cost than someone else can.
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Law of Increasing Opportunity Costs
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As more of a good is produced, the opportunity costs of producing that good increase.
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Production Possibilities Frontier (PPF)
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The possible combinations of two goods that can be produced in a certain period of time under the conditions of a given state of technology and fully employed resources.
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Productive Efficient
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The condition where the maximum output is produced with the given resources and technology.
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Productive Inefficient
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The condition where less than the maximum output is produced with the given resources and technology. Productive inefficiency implies that more of one good can be produced without any less of another being produced.
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Technology
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The body of skills and knowledge involved in the use of resources in production. An advance in technology commonly increases the ability to produce more output with a fixed amount of resources or the ability to produce the same output with fewer resources.
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