AP Econ Unit 1 Flashcards

5794283975	Absolute Advantage	Can produce more of a good with given resources. Can produce the good with fewer inputs. Is "BEST"	0
5794289790	Comparative Advantage	The ability to produce a good at a lower opportunity cost than another producer. "Not So Bad At"	1
5794292572	Opportunity Cost (trade-off)	The value of the next best forgone alternative	2
5794295047	Resource Specialization	explains increasing opportunity cost. Some resources are better suited to make a specific goods. ( A cow is a useful resource to produce milk but not a car )	3
5794301397	Increasing Opportunity Cost	as resources are pushed into the production of a good, an increasing amount of the other good must be given up; occurs because well-suited resources are used up and less adaptable inputs must be used instead to produce the desired good.	4
5794308900	Scarcity	unlimited wants with limited resources	5
5794315736	Factors of Production, Inputs, Resources	Land, Labor, Capital, Entrepreneurship	6
5794316807	Marginal	Additional	7
5796087812	Three basic economic questions	What to produce; How to produce; For whom to produce	8
5796088272	Adam Smith	Wealth of Nations. Invisible hand= self interest. Explains how capitalism results in economic growth.	9
5796091860	Negative Externality (spill-over)	cost to bystander from the production and consumption of a good. Pollution from a coal fire plant/ Cigarette Smoke. Market only: too much of these goods produced and price is too low. Government often regulates or taxes.	10
5796203046	Positive Externality (spill-over)	benefit to bystander from the production and consumption of a good. Flu shot, schools. Market only: too little of these goods produced and price is too high. Government often provides or subsidizes.	11