The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
-If an individual can produce a good or service with a lower opportunity cost than another individual, then he or she is said to have the comparative advantage.
Definitions:
Long-Run Cost Function
A representation of the total cost associated with production when all factors of production are variable.
Positive Amount
A value greater than zero, often used in financial and mathematical contexts to denote an increase or positive quantity.
Total Cost Functions
Mathematical representations that describe how the total cost of production changes as the output level varies.
Market Price
The existing rate at which an asset or service can be acquired or disposed of in a trading environment.
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