The ability to produce a good at a lower opportunity cost than someone else is called
A) competitive production.
B) comparative advantage.
C) selective advantage.
D) absolute advantage.
B
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Answer the following statements true (T) or false (F)
1. The average product can be calculated for any unit of input by dividing the total product by the marginal product. 2. If all inputs are increased by 25 percent and output by 35 percent, increasing returns to scale exist. 3. Implicit cost is an opportunity cost of doing business. 4. Opportunity cost and implicit cost are both explicit costs. 5. Marginal cost is the change in total cost that results from producing one less or one more unit of output.
When supply and demand for a product increase simultaneously, we
A) can predict that both the market clearing price and the equilibrium quantity will increase. B) can predict that both the market clearing price and the equilibrium quantity will decrease. C) cannot predict the market clearing price, but know that the equilibrium quantity will increase. D) cannot predict the change in either the equilibrium quantity or the market clearing price.
Why do major-league baseball players get paid more than minor-league players?
a. Major-league players are better athletes. b. The higher wage reflects a compensating differential. c. Playing in the major leagues in more pleasant then playing in the minor leagues. d. The higher wage is often due to educational discrepancies.
Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it. What is the most a contractor can charge to pave the driveway and still be assured of being hired by at least one of them?
A. $1,500 B. $600 C. $900 D. $2,400