question
absolute advantage
answer
one person has this advantage over another if he or she takes fewer hours to perform a task than the other person
question
comparative advantage
answer
one person has this advantage over another if his or her opportunity cost of performing a task is lower than the other person's opportunity cost
question
Principle of Comparative Advantage
answer
Everyone does best when each person (or country) concentrates on the activities for which his or her opportunity cost is lowest.
question
Production Possibilities Curve
answer
A graph that describes the max. amount of one good that can be produced for every level of possible production of the other good.
question
Attainable point
answer
any combination of goods that can be produced using currently available resources.
question
Unattainable point
answer
any combination of goods that cannot be produced using currently available resources.
question
inefficient point
answer
and combination of goods for which currently available resources enable an increase in the production of one good without a reduction in the production of the other.
question
efficient point
answer
any combination of goods for which currently available resources do not allow an increase in production of one good without a reduction in the production of the other.
question
Principle of Increasing Opportunity Cost
answer
In expanding the production of any good, first employ those resources with the lowest opportunity cost, and only afterward turn to resources with higher opportunity costs. (also called low hanging fruit principle).
question
outsourcing
answer
a term increasingly used to connote having services performed by low-wage workers overseas.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
