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Econ Ch 2 Key Terms
Key Terms for Mr. Sal's Econ Classes on Ch 2 in the text.
Question | Answer |
---|---|
The mechanism that answers the "What, How, and For Whom?" | Economic System |
Economy controlled by only the private sector, no government interference. | Pure Market Economy |
All resources and decisions are government based. | Pure Centrally Planned Economy |
Means Centrally Planned Economy. | Command Economy |
An economy that has many aspects of both command and market economies. | Mixed Economy |
All methods of production are run by private sector. | Market Economy |
An economy that is in the process of modernization. | Transitional Economy |
Economy where you only make/grow what you use. | Traditional Economy |
Shows the possible combinations of two provided goods or services at max.efficiency. | Production Possibilities Frontier (PPF) |
Producing the maximum with available resources. | Efficiency |
To make more of one product, you must give up more resources from another. | Law of increasing opportunity cost |
An outward shift of the PPF. | Economic Growth |
The ability to do something with fewer resources than your competition. | Absolute Advantage |
The worker with the lower opportunity cost specializes in providing that good or service. | Law of Comparative Advantage |
The focus on what workers are good at providing. | specialization |
The trade of goods and services instead of monetary payment. | barter |
An accepted medium of exchange in an economy. | money |
Work is broken up between individuals who specialize in tasks. | division of labor |