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COMPARATIVE ADVANTAGE: The ability to produced one good at a relatively lower opportunity cost than other goods. While pointy-headed economists developed this idea for nations, it's extremely important for people. A comparative advantage means that no matter how good (or bad) you are at producing stuff, there's always something that you're best (or least worst) at doing. Moreover, because you can produce this one thing by giving up less than what others give up, you can sell it or trade it to them. This idea of comparative advantage means that people and nations can benefit by specialization and exchange. You do what you do best, then trade to someone else for what they do best. Both sides in this trade get more and are thus better off after than before.
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Lesson 14: Aggregate Supply | Unit 3: The Curves
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Page: 10 of 20
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While the market supply curve and the short-run aggregate supply curve look similar, there are important differences.- The price and quantity for the short-run aggregate supply curve are the price level and real production, not the price and quantity of a specific good.
- The positive slope of the short-run aggregate supply curve is based on rigid wages, tapping into frictional, and structural unemployment, and misperceptions about real wages. The slope of the market supply curve is based on increasing opportunity cost.
- The short-run aggregate supply curve is not just the aggregation of all market supply curves in the economy.
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TAXES Legally mandated payments to government that are NOT made in exchange for a good or service. The primary reason government collects taxes is the revenue needed to pay for government expenditures, especially administrative expenses and the provision of public goods. Taxes are one of two methods of obtaining the revenue the government sector uses to pay for expenditures. The other is government borrowing.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time at a flea market hoping to buy either an ink cartridge for your printer or a rechargeable battery for your camera. Be on the lookout for the happiest person in the room.
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In the early 1900s around 300 automobile companies operated in the United States.
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"Experience keeps a dear school, but fools will learn in no other. " -- Benjamin Franklin
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AAXICO
American Air Export and Import Company
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