Econ 240 1st Edition Lecture 5Outline of Last Lecture I. The Economic Problem a. Production Possibility Frontierb. Production efficiency: When we cannot produce more of one good or service without producing less of something else c. Trade off: An exchange giving up one thing to get something else d. Free lunch: Getting something without giving up something else II. Specialization and Tradea. Absolute Advantage: if a person can produce more of several or all goods (or services) than another person b. Comparative advantage: if a person can produce a good (or service) at a lower opportunity cost than someone else Outline of Current Lecture II. Demand and supply a. Demanda.i. Quantity demanded is the amount (of a good or service) that people are willing and able to buy at specified price during specified time perioda.i.1. Law of Demand a.i.2. Market DemandCurrent LectureDemand and Supply - Demand Quantity demanded is the amount (of a good or service) that people are willing and able to buy at a specified price during a specified time period ▪ Law of Demand These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute. If Price of goods rises, quantity demanded of good decrease  If price of good falls, quantity demanded of good increases ▪ Market Demand  The sum of the demand of all buyers in