The Notion That Specialization in Goods That One Can Produce

question 229

Multiple Choice

The notion that specialization in goods that one can produce at a low opportunity cost will make it possible for trading partners to produce a larger joint output is called

• A) the law of absolute advantage.
• B) the law of comparative advantage.
• C) the law of production possibilities.
• D) the exchange maximum principle.

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Definitions:

Cash Registers

Mechanical or electronic devices used in shops to calculate and record sales transactions, and to store money.

Impulse

Impulse refers to a sudden desire or change in motion, often used in physics to describe the change in momentum resulting from a force applied over time, but also applicable to spontaneous decisions in human behavior.

Neoclassical Economics

A method in economics that centers on how the distribution of goods, output, and income in markets is determined by the forces of supply and demand.

Bulk Discounts

Price reductions offered to buyers when they purchase large quantities of goods, used as an incentive for larger orders.