For All Routes with Positive Flows in an Optimized Transportation

question 24

Multiple Choice

For all routes with positive flows in an optimized transportation problem,the reduced cost will be:

• A) zero 
• B) how much less shipping costs would have to be for shipments to occur along that route 
• C) how much more shipping costs would have to be for shipments to occur along that route 
• D) how much the capacity is along that shipping route

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Definitions:

Comparative Advantage

is the ability of an individual or country to produce a good or service at a lower opportunity cost than competitors.

Opportunity Cost

The cost of what is foregone in order to pursue a certain action, essentially the benefits you could have received by taking an alternative action.

Consumer Sovereignty

The idea that consumers ultimately dictate what will be produced (or not produced) by choosing what to purchase (and what not to purchase).

Economic Problem

The issue of limited resources to meet unlimited wants and needs, requiring choices and prioritization.