Chapter 2- Specialization and Exchange

Question 1

production possibilities frontier (PPF)

Answer 1

a line or curve that shows all the possible combinations of two outputs that can be produced using all available resources

Question 2

efficient points

Answer 2

combinations of production possibilities that squeeze the most output possible from all available resources

Question 3

absolute advantage

Answer 3

the ability to produce more of a good or service than others can with a given amount of resources

Question 4

comparative advantage

Answer 4

the ability to produce a good or service at a lower opportunity cost than others

Question 5

specialization

Answer 5

spending all of your time producing a particular good