AP Macro Unit 1 Vocab #2

Front

Product Market

Back

The place where goods and services produced by businesses are sold to households.

Front

Factor/Resource Market

Back

The place where resources (land, labor, capital, and entrepreneurship) are sold to businesses.

Front

Factor Payments

Back

Payment for factors of production: rent, wages, interest, profit.

Front

Input Method

Back

Method for determining comparative advantage using the formula IOU (Other goes Under)

Front

Output Method

Back

Method for determining comparative advantage that measures what is produced using the formula OOO (Other goes Over)

Front

Productive Efficiency

Back

Any point on the PPC where products are produced at the least cost.

Front

Allocative Efficiency

Back

Most optimal point on PPC for products desired by society.

Front

Absolute Advantage

Back

The producer that can produce the most output or requires the least inputs.

Front

Comparative Advantage

Back

The producer with the lowest opportunity cost

Front

Transfer Payments

Back

When the government redistributes income