When a Person Has a Comparative Advantage in Producing a Good

question 56

Multiple Choice

When a person has a comparative advantage in producing a good or service, the person has

• A) a higher opportunity cost in producing that product than someone else.
• B) an increasing marginal benefit in producing the good.
• C) a decreasing opportunity cost in producing that product.
• D) a constant opportunity cost in producing that product.
• E) a lower opportunity cost in producing that product than someone else.

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Definitions:

Competitive Industry

A market sector characterized by many firms competing against each other for customers, leading to innovation and lower prices.

Market Demand

The total quantity of a particular good or service that all consumers in a market are willing and able to purchase at various prices.

Competitive Industry

An industry environment where numerous competitors offer similar products or services, resulting in the need for businesses to vie for market share and customer attention.

Homogenous Product

Goods that are identical in quality and cannot be distinguished from one another by consumers.