12 key elements of economics. Verified Instructor Notes for Exam Success

the value (not monetary cost) of the last alternative you gave up element 3 decisions are made at the margins briefly explain element 3. make choices that generate more benefits than costs and refrain from actions that are more costly than they are worth what is the production possibilities curve (PPC)? the simplest economic model that represents scarcity, trade-offs, and opportunity costs; shows how an individual, firm government or country allocates resources between 2 competing activities, goods, or services what can we assume about any individual PPC? the firm/business is operating at full employment; with fixed resources and technology; and only producing 2 goods element 4 trade promotes economic progress what are 3 sources of gain from trade? 1. trade moves goods from people who value them less to people who value them more 2. trade makes larger outputs and higher consumption possible as the result of specialization 3. trade makes larger outputs possible because it facilitates the use of mass production models