When a Person Has a Comparative Advantage in Producing a Good

question 34

Multiple Choice

When a person has a comparative advantage in producing a good or service,the person has

• A)a decreasing opportunity cost in producing that product.
• B)a higher opportunity cost in producing that product than someone else.
• C)a lower opportunity cost in producing that product than someone else.
• D)a constant opportunity cost in producing that product.
• E)an increasing marginal benefit in producing the good.

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Definitions:

Capital Goods

Long-lasting goods acquired by a business to produce goods or services, as opposed to being sold directly to consumers.

Productive Resources

Inputs used in the production of goods or services in order to make an economic profit. These include land, labor, capital, and entrepreneurship.

Consumer Goods

Products and services that are purchased or consumed by individuals or households for their direct satisfaction and needs.

Pollution Permits

Allowances provided by government authorities that enable the holder to emit a specific amount of pollutants into the environment.