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Opportunity Cost::
Opportunity cost is defined as the highest valued option forgone.
Economic goods::
Economic goods are goods whose quantity is insufficient to satisfy all our wants, so that more is preferred to less.
Free goods::
Free goods are goods whose quantity is sufficient to satisfy all our wants, so that more of them are not preferred.
Law of diminishing marginal returns::
Holding technology level constant, as more variable factors are added to a given quantity of fixed factors, marginal products eventually drops.
Law of demand::
When the price of a good decrease(increase), it's quantity demanded will increase(decrease).
Law of supply::
When the price of a good increase(decrease), it's quantity supplied will increase(decrease).
Price elasticity of demand::
Price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in it's own price.
Labour productivity::
Labour productivity is measured as the output per unit of lobour over a period of time.
Labour supply::
Labour supply is measured by the number of working hours provided by workers.
GDP::
Gross domestic product is a measure of the total monetary value of final goods and services produced by all resident producing units of an economy over a period of time.
GNP::
GNP measures the total income earned by residents of an economy from engaging in economic activities.
CPI::
The consumer price index measures changes in the price level of a basket of consumer goods that reflect the expenditure pattern of a typical household.
The principle of Comparative advantage::
When countries specialise in goods which have a lower opportunity cost of production, their total output will be maximised.
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