by Elizabeth Zapata 6 years ago
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Capital accumulation
technological change
produce one or two services or goods and trade others with other people
absolute advantage
more productive person than another
comparative advantage
lowest opportunity cost
There are two ways to coordinate the market for the production of goods and services.
Money
Property rights
markets
Business
Exchange in FPP
Any choice made from the FPP implies an exchange
they imply
Opportunity cost
It is the highest value alternative that is sacrificed
Increasing opportunity cost
It is a proportion
It is the reduction of the quantity produced of a good
the increase of the quantity produced of another good
Allocation efficiency
When goods and services are produced at the lowest possible cost and in the quantities that provide the greatest possible benefit.
Marginal Benefit
It is the benefit obtained by producing one more unit of the same good
Marginal Cost
Of a good is the opportunity cost of producing an additional unit of it.
