Individuals a and B Can Both Produce Good X

question 25

Multiple Choice

Individuals A and B can both produce good X.We say that A has a comparative advantage in the production of good X if

• A)A has a lower opportunity cost of producing X than B.
• B)A has a higher opportunity cost of producing X than B.
• C)A can produce more units of X in a given time period than B.
• D)A can produce X using newer technology than B.
• E)A can produce less units of X in a given time period than B.

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Definitions:

Annum

A Latin term for year, often used in financial contexts to denote per year.

Deferred Payment

An agreement to postpone payment until a later date, often used in sales and financing arrangements.

Simple Interest

Simple interest is a method of calculating interest where the interest charge is based on the original principal amount and does not accumulate or compound over time.

Variable Interest Rate

An interest rate that can fluctuate over time, usually based on underlying economic indicators or indices.