Definitions
the fundamental problem facing all people; unlimited wants and limited resources to satisfy those wants
Scarcity
Land
A point inside the curve
Underutilization or inefficient use of resources
Occurs when an individual or country can produce more of a good using the same amount of resources.
Absolute advantage
a non-tangible action or activity that is performed for someone else
service
Cashier, builder, teacher
Labor
Point along the curve
Efficient use of resources
Occurs when an individual or country can produce a good at a lower opportunity cost than someone else.
Comparative advantage
the resources required to produce goods and services
Factors of Production
Tools, oven, truck
Capital
Point outside the curve
Currently unattainable
Somchai can produce 4 shirts or 1 truck. Mary can produce 10 shirts or 5 trucks. Who has an absolute advantage in producing shirts?
Mary
the study of choices; how individuals and groups seek to satisfy their wants and needs considering scarcity.
economics
Bill Gates, Steve Jobs etc.
Entrepreneur
What happens to the PPC when productive resources increase?
Shifts rightwards
Somchai can produce 4 shirts or 1 truck. Mary can produce 10 shirts or 5 trucks. Who has a comparative advantage in producing trucks?
Mary