What's it: A production possibilities curve or production possibilities frontier is an economic model for describing the two goods we can produce efficiently using available resources and technology. Efficiency is important because we are
Opportunity Cost
Opportunity Cost: Meaning, Importance, Examples
Choice makes you face the opportunity cost, whether you realize it or not. At some time, you may have to choose between the two options that you both want. But, because your resources are limited (for example, you don't have enough money in your
Absolute Advantage: Examples, Assumptions, Criticism
What's it: Absolute advantage refers to the ability to produce goods or services more efficiently than others. As a result, those with this advantage can produce at a lower absolute cost. Absolute advantage is important for explaining why