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ECON UNIT ONE INSANITY

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  • Trade based on total output
    Absolute advantage
  • Trade based on opportunity cost
    Comparative advantage
  • 4 scarce factors of production
    land, labor, capital, ET
  • An authority allocates goods in this system
    Command (communism ok)
  • Father of modern capitalism
    Adam SMith
  • Least cost production
    Production Efficiency
  • 4 payments to resources
    wages, rent, interest, profit
  • The PPC curve iis concave relative to the origin due to
    increasing opportunity cost.
  • Joan gets 4 utils per dollar from her current allocation of apples, and .5 from oranges. What should she do?
    But more apples
  • Market allocate goods in this system
    capitalism
  • Over time, the satisfaction per unit declines
    Diminishing marginal utility
  • tinstaafl
    No such thing as a free lunch
  • The best forgone choice when a decision is made
    Opportunity Cost
  • When MC=MB
    allocative efficiency
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