Term
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Definition
Measures the next best alternative forgone
- If the government spends £10 billion on NHS the opportunity cost is the benefits from spending it on education etc |
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Term
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Definition
| Firms use it as a decision making tool to maximise profits |
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Term
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Definition
Situation that arises from unlimited wants and limited resources
- The government makes choices of where to allocation resources |
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Term
| - Basic economic problem: |
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Definition
“Unlimited wants combined with limited resources”
- Faced by producers, consumers and the government |
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Term
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Definition
| Product Possibility Frontier (PPF) |
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