ECO 1302 Chapter Notes - Chapter 3: Opportunity Cost, Comparative Advantage
22 Jan 2017
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The instruments provided by nature or by people that are used to create goods and services. Natural resources include minerals, soil, water, and air. Labour is a scarce resource became of time limitations and because skilled workers are rare. These resources are often referred to as land, labour, and capital. They are also called inputs or factors of production. The value of the next best alternative that the decision forces the decision maker to forgo. One that best serves the objectives of the decision makers, whatever those objectives may be. It is selected by explicit or implicit comparison with the possible alternative choices. The term optimal connotes neither approval nor disapproval of the objective itself. The labour, raw materials, electricity, and other resources it uses to produce its outputs. Shows the different combinations of various goods that a producer can turn out, given the available resources and existing technology.
