01:220:103 Chapter Notes - Chapter Ch 1-3: Demand Curve, Inferior Good, Ceteris Paribus

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Economics: the study of choice under conditions of scarcity. Opportunity cost: what we give up when making a choice. When the alternative to a choice are mutually exclusive, only the next best choice the one that would actually be chosen is used to determine the opportunity cost of the choice. Capital stock: total amount of capital at a nations disposal. Ppf: curve showing all combos of 2 goods that can be produced with the resources available. A firm/industry/economy is productively inefficient if it could produce more of at least one good without producing less of another. In order to produce more goods/services in future we must shift resources toward r&d. & capital production, & away from producing things we"d enjoy right now. Specialization: a method of production where ach person concentrates on limited # of activities. Absolute advantage: the ability to produce a good/service using fewer resources than others use.

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