"You Must Reduce Shipment Costs by $10 Per Package or We

question 19

Multiple Choice

"You must reduce shipment costs by $10 per package or we will give our business to your competitor." This is an example of:

• A)A commitment.
• B)A distributive tactic.
• C)A dirty trick.
• D)An appeal to a norm of fairness.

---

Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitors.

Ricardian Model

An economic theory that focuses on comparative advantage, explaining how countries can gain from trade by specializing in producing goods at a lower opportunity cost.

Production Possibility Frontiers

These are curves that depict the maximum potential output of a combination of two goods or services that an economy can produce with available resources.

Opportunity Cost

Forgoing the benefit of the next preferable alternative comes at a cost during decision-making.