Term
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Definition
| Possessed when one takes fewer hours to perform a task than another. |
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Term
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Definition
| Possessed when one's opportunity cost of performing a task is lower than another's opportunity cost of performing the same task. |
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Term
| Principle of Comparative Advantage |
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Definition
| Total output is largest when each person (or country) concentrates on the activities for which their opportunity cost is the lowest. |
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Term
| Production Possibilities Curve |
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Definition
| A graph describing the maximum amount of one good that can be produced for every possible level of production of the other good. |
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Term
| Principle of Increasing Opportunity Cost |
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Definition
| In expanding production of a good, one would first employ those resources with the lowest opportunity cost. Only when those resources are used up would one employ those of a higher opportunity cost. |
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Term
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Definition
| When an economy is using all economic resources in the most effective way. |
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Term
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Definition
| When it is impossible to organize economic resources to make someone better off without making somebody else worse off. |
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