ECON 1050 Chapter Notes - Chapter 2: Marginal Cost, Marginal Utility, Absolute Advantage

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Production possibilities frontier(ppf) is the line between goods and services we can produce vs those we can not. Production efficiency happens when goods and services are produced at the lowest possible cost. Occurs at the points on the ppf. Opportunity cost is the highest valued alternative forgone. Marginal cost is the opportunity cost of producing one more unit. Marginal benefit is the benefit received from one more unit. Comparative advantage is when one can perform an activity at a lower cost than. Absolute advantage means one is more productive than others.

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