The Ability of One Producer to Create More of a Good

question 160

Multiple Choice

The ability of one producer to create more of a good than another producer using the same quantity of resources is called

• A) comparative advantage.
• B) absolute advantage.
• C) a positive-sum game.
• D) gains from trade.
• E) the law of increasing relative cost.

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Definitions:

Yield

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost or current market value.

Convexity

A gauge of how changes in interest rates affect the relationship between the price of bonds and their yields, showing alterations in the bond's duration.

Price-yield Curve

A graphical representation that shows the relationship between the yield of a bond and its price, demonstrating how bond prices move inversely to changes in yield.

Rate of Change

A mathematical measure that calculates the percentage change in the value of a variable over a specific period.