The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:
a. comparative advantage.
b. a tradeoff.
c. marginal cost.
d. opportunity cost.
e. gains from trade.
e
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When Peter's Pizza Company produces 50 pizzas, its average total cost is $8 . The marginal cost of the 51st pizza is $7 . If the firm chooses to produce the 51st pizza, what will happen to average total cost? Explain
What will be an ideal response?
Calculate the income elasticity of demand for DVDs, where a 10 percent increase in income results in a 20 percent increase in the demand for DVDs. Decide from your answer, whether DVDs are normal or inferior goods
For an inferior good, an increase in consumer incomes results in an increase in the quantity demanded of the good
a. True b. False Indicate whether the statement is true or false
A price floor set above an equilibrium price tends to cause persistent imbalances in the market because
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.