chapter 7, efficiency of production Flashcards
the quality of producing effectively with a minimum of wasate
efficiency
the total amount invested in the production of a good
input
the total amount of a good that is produced
output
two methods by which a producer can improve his efficiency
keeping his input steady and increase his output
keeping his output constant while reducing his input
type of work that creates the wealth of nations
intelligent work
the sum cost of all the factors of production used in making goods
total cost
the sum of all the factors of production used in producing one unit of a good
average cost
the system henry ford used to produce large quantities of automobiles
mass production
the ability of one entity to produce goods or provide services more efficiently than his competitors when given the same resources
absolute advantage
the ability of an entity to produce a good or provide a service at an opportunity cost that is lower than that of another producer
comparative advantage
the production of goods in which a country or region has absolute or comparative advantages
geographical specialization
the theory that domestic manufacturers need government protection against foreign competitors
protectionism
whenever there are no restrictions or penalties placed upon the exchange of goods the result is:
free trade
taxes that must be paid on imported goods before they are allowed to enter an area
tariffs
established the principle of comparative advantage
david rricardo
