ch 2 macroeconomics
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3 Fundamental Economics Question
- What - to produce
- How - to produce
- For whom - to produce
The best alternative sacrificed for a chosen alternative
An examination of the effects of additions to or subtractions from a current situation.
Production Possibilities Curve
A curve that shows the maximum combinations of two outputs an economy can produce in a given period of time with its available resources and technology.
The body of knowledge applied to how goods are produced.
Law of Increasing Opportunity Cost
The principle that the opportunity cost increases as production of one output expands
The ability of an economy to produce greater levels of output, represented by an outward shift of its production possibility curve.
The accumulation of capital, such as factories, machines and inventories that is used to produce goods and services.
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