Absolute advantage is
A) producing at a lower opportunity cost.
B) producing a good using the fewest inputs.
C) producing a good only when demand is high.
D) producing a good that requires imported components.
Answer: B
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Use the information below to explain adjustments that move the economy to a long-run equilibrium. Assume that firms and workers have adaptive expectations
The current unemployment rate = 7%. The natural rate of unemployment = 5.5%. Last year's inflation rate = 5%. This year's inflation rate = 4%.
The origin of the idea of a trade-off between inflation and unemployment was a 1958 article by
A) A.W. Phillips. B) Edmund Phelps. C) Milton Friedman. D) Robert Gordon.
Four major rivers flow from the decreasing snow melt of the Himalayan mountains. If you are a resident of northern India, which of these four rivers is most likely to threaten food production?
A. The Indus B. The Yangtze C. The Mekong D. The Ganges
Which of the following statements presents the most complete view of economics?
a. It is about studying the stock market. b. It is about making choices given limited resources. c. It is about forecasting business decisions. d. It is about using money wisely.