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Chapter 2
Cowen and Tabarrok
Term | Definition |
---|---|
Preferences | The value a person puts on a good or service. The reason trades occur is the seller has a lower value of the item they are selling than the buyer. |
Autarky | A nation or person is economically self-sufficient. Produces all goods and services they consume |
Absolute Advantage | the ability to produce the same good using fewer inputs than another produce |
Productivity | in economics, measures output per unit of input, such as labor, capital or any other resource |
PPF | shows all the combinations of goods that a country can produce given its productivity and supply of inputs |
Comparative Advantage | the ability to produce a good with a lower opportunity cost |