What is comparative advantage? What is absolute advantage?
What will be an ideal response?
Comparative advantage is the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors. Absolute advantage is the ability of an individual, firm, or country to produce more of a good or service than competitors, using the same amount of resources.
You might also like to view...
Given an upward sloping aggregate supply curve, which of the following changes in the aggregate demand curve is observed when the Fed reduces the money supply?
a. The aggregate demand curve shifts leftward, lowering real GDP and the price level b. The aggregate demand curve shifts leftward, raising real GDP and the price level. c. The aggregate demand curve shifts leftward, lowering real GDP but raising the price level. d. The aggregate demand curve shifts rightward, raising real GDP and the price level. e. The aggregate demand curve shifts rightward, lowering real GDP but raising the price level.
In the long run, if a firm's total cost exceeds its total revenue at all output levels, it should
a. always exit the industry b. always continue operating c. increase the amount of its fixed inputs d. increase the proportion of its total cost that is fixed e. maximize the difference between its marginal revenue and its marginal cost
When the money market is drawn with the value of money on the vertical axis, the money demand curve slopes
a. upward, because at higher prices people want to hold more money. b. downward, because at higher prices people want to hold more money. c. downward, because at higher price people want to hold less money. d. upward, because at higher prices people want to hold less money.
The separation of real and nominal variables is referred to as the classical
a) determinant. b) diseconomy. c) discount. d) dichotomy.