If an Individual Is Able to Produce a Good with a Lower

question 18

Multiple Choice

If an individual is able to produce a good with a lower opportunity cost than someone else, then that individual has

• A)avoided opportunity costs.
• B)an interaction advantage.
• C)the advantage of producing all goods.
• D)removed scarcity.
• E)a comparative advantage.

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Definitions:

Annual Rate

A percentage representing the interest or growth a sum of money would earn over the course of a year.

Discounted

Reduced in price or value, often to encourage purchase or reflect the present value of future cash flows.

Simple Interest

Simple interest is a method of calculating the interest charge on a loan or investment based on the original principal amount and not on accumulated interest.

Contract

A legally binding agreement between two or more parties that outlines terms and conditions.