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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Technical efficiency
A) ignores the values of the chooser. B) is a necessary precondition for the attainment of economic efficiency. C) is always attained if economic efficiency is achieved. D) is attained whenever the ratio of physical output to physical input is greater than unity. E) is easier to achieve than economic efficiency.
Of the following, the largest component of GDP is
A) personal consumption expenditure. B) gross private domestic investment. C) government expenditure on goods and services. D) net exports of goods and services.
One economic truism is that any nation's restriction of imports will ultimately lead to
A) an increase in exports. B) a reduction in exports. C) an economic upswing. D) an increase in GDP.
A commercial bank sells a $10,000 government bond to a securities dealer. The dealer pays for the bond in cash, which the bank adds to its vault cash. The money supply has:
A. Decreased by $10,000 multiplied by the reciprocal of the required reserve ratio B. Decreased by $10,000 C. Increased by $10,000 D. Not been affected