comparative advantage when a country can produce a good at a lower cost in terms of other goods; or, when a

country has a lower opportunity cost of production

invisible hand Adam Smith's concept that individuals' self-interested behavior can lead to positive social

outcomes

law of diminishing marginal utility as we consume more of a good or service, the utility we get from

additional units of the good or service tends to become smaller than what we received from earlier units

law of diminishing returns as we add additional increments of resources to producing a good or service, the

marginal benefit from those additional increments will decline

marginal analysis examination of decisions on the margin, meaning a little more or a little less from the

status quo

normative statement statement which describes how the world should be

opportunity cost measures cost by what we give up/forfeit in exchange; opportunity cost measures the value

of the forgone alternative
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