The ability to produce a good or service at a lower opportunity cost than other producers is
A) absolute advantage.
B) the quota system.
C) intellectual property.
D) comparative advantage.
Answer: D
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Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. This indicates that there is
A) a public good which should be produced. B) regressive taxation of the product. C) a positive externality. D) a negative externality.
Buying electricity off the freewheeling grid at one quarter 'til the hour for delivery on the hour illustrates:
a. relational contracts with distributors b. vertical requirements contracts c. spot market transactions d. variable price agreements
An example of a heuristic is:
A. predatory lending. B. a rule of thumb. C. common sense. D. a framing device.
If UIP holds, the foreign interest rate is 10%, and the home currency is expected to depreciate by 4%, then the home interest rate is:
a. 4% b. 6% c. 10% d. 14%