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Economics

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Opportunity cost – the value of the next best alternative sacrificed when we make a choice. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else. If your next-best alternative to seeing the movie is reading the book, then the opportunity cost of seeing the movie is the money spent plus the pleasure you forgo by not reading the book.
Ceteris paribus - "all other things being equal". In economics and finance, the term is used as all else equal or a shorthand for indicating the effect of one economic variable on another, holding constant all other variables that may affect the second variable. For example, when discussing the laws of supply and demand, one could say that if demand for a given product outweighs supply, ceteris paribus, prices will rise. Here, the use of "ceteris paribus" is simply saying that as long as all other factors that could affect the outcome remain constant, prices will increase in this situation
Allocative efficiency - This occurs when there is an optimal distribution of goods and services, taking into account consumer’s preferences. A more precise definition of allocative efficiency is at an output level where the price equals the Marginal Cost (MC) of production. This is because the price that consumer’s are willing to pay is equivalent to the marginal utility that they get. Therefore the optimal distribution is achieved when the marginal utility of the good equals the marginal cost.
Production possibility frontier(ppf) - A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.). The PPF assumes that all inputs are used efficiently. A downward curve represents a trade off. A curve due to the law of increasing opportunity cost. Scarcity; have insufficient funds to produce a...

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