Ch. 2 Vocab

Question 1

Production Possibility Table

Answer 1

A table that lists the trade-offs between 2 choices

Question 2

Production Possibility Curve (PPC)

Answer 2

A curve measuring the maximum number of outputs that can be obtained from a given number of inputs

Question 3

Comparative Advantage

Answer 3

Better suited to the production of one good, than to the production of another good.
Usually means lower opportunity cost.

Question 4

Productive Efficiency

Answer 4

Achieving as much output as possible from a given amount of inputs or resources

Question 5

Inefficiency

Answer 5

Getting less outputs from inputs that, if devoted to some other activity, would produce more output

Question 6

Efficiency

Answer 6

Achieving a goal using as few inputs as possible

Question 7

Laissez-faire

Answer 7

An economic policy of leaving coordination of an individual’s actions to the market

Question 8

Globalization

Answer 8

The increasing integration of economies, cultures, and institutions across the world

Question 9

Law of one price

Answer 9

The wages of workers in one country will not differ significantly from the wages of (equal) workers in another institutionally similar country