Definitions

a) axiom or premise - a proposition that is assumed without proof for the sake of studying the consequences that follow from it.
b) empirical - Verifiable or provable by means of observation or experiment
c) positive statement - What is, a fact
normative statement - What should be
d) Fundamental economic problem - How to fulfill unlimited needs & wants with scarce resources
e) Economic good - tangible goods/products
f) PPF - or “transformation curve” is a graph that shows the different rates of production of two goods that an economy (or agent) could efficiently produce with limited productive resources. Points along the curve describe the trade-off between the two goods, that is, the opportunity cost. Opportunity cost here measures how much an additional unit of one good costs in units forgone of the other good. The curve illustrates that increasing production of one good reduces maximum production of the other good as resources are transferred away from the other good.
g) a binding constraint - When we want one or more of one commodities in our bundle, we have to give up some of the other commodities.
h) productive efficiency - when production is along the PPF curve
i) opportunity cost - The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
j) Marginal Opportunity Cost - aka marginal rate of transformation (MRT). It describes numerically the rate at which one good can be transformed into the other. It is also called the (marginal) "opportunity cost” of a commodity, that is, it is the opportunity cost of X in terms of Y at the margin. It measures how much of good Y is given up for one more unit of good X or vice versa. The shape of PPF is commonly drawn as concave downward to represent increasing opportunity cost with increased output of a good. Thus, MRT increases in absolute size as one moves from the top left of the PPF to the bottom right of the PPF.
k) Autarky - the condition of self-sufficiency, esp. economic, as applied to a nation.