The Law of Comparative Advantage Says That a Person Should

question 150

Multiple Choice

The law of comparative advantage says that a person should produce a good if she

• A)has the greatest desire to consume that good
• B)has the lowest opportunity cost of producing that good
• C)has an absolute advantage in a related activity
• D)has a comparative advantage in a related activity
• E)is equally good at producing this good as someone else is

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Definitions:

Pressure Washer

A mechanical device that uses high-pressure water spray to clean surfaces, removing dirt, grime, and other materials.

Commercial Rents

Payments made for the use of commercial property, such as offices, shops, or industrial spaces.

Destination Contract

A contract specifying that the seller is responsible for delivering goods to a specific location, with the risk of loss transferring upon delivery.

Shipment Contract

An agreement where the seller is obligated to transport goods to a specific destination, with title and risk of loss passing to the buyer upon delivery to a carrier.