ECON101 Midterm: Midterm 1 Review Pckg
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ECON101 Full Course Notes
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What is the difference between microeconomics and macroeconomics: goods and services are produced by using productive resources that economists call factors of production, factors of production are grouped into four categories: Land (shorthand for all natural resources) which earns rent. Labour (includes human capital knowledge and skills from education, training, experience) which earns wages. Give three examples of opportunity costs that you make every day. The production possibilities frontier (ppf) is the boundary between those combinations of goods and services that can be produced and those that cannot. Every choice along the ppf involves a ________. When we cannot produce more of any one good without giving up some other good that we value more highly, we have achieved allocative efficiency. A person has a comparative advantage in an activity if that person can perform the activity at a lower opportunity cost than anyone else. A person has an absolute advantage if that person is more productive than others.
