A Producer Is Said to Have an Absolute Advantage in the Production

question 124

Multiple Choice

A producer is said to have an absolute advantage in the production of a good when the producer ________ compared to other producers.

• A) has a lower opportunity cost
• B) has a higher opportunity cost
• C) can produce more units of the good per hour
• D) can sell the good at a higher price

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Definitions:

Trading Off

The act of giving up one benefit in order to gain another, often seen as a compromise.

Rationale

The underlying reasons or logical basis for a belief, action, or method.

Premature Dominance

The early establishment of control or influence in a situation before all factors have been appropriately considered.