Given Two Economic Systems, a and B, If Economy a Has

question 126

Multiple Choice

Given two economic systems, A and B, if economy A has a absolute advantage in the production of widgets, then

• A)fewer inputs are necessary to produce widgets in economy A than in economy B.
• B)economy A must give up less of all other goods to produce widgets than economy B.
• C)economy A is less efficient in the production of widgets than economy B.
• D)economy A would not benefit from the specialization of production.

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Definitions:

Free-Rider

An individual who benefits from resources, goods, or services without paying for the cost of the benefit.

Market Forces

The economic factors affecting the price, demand, and availability of goods and services in a free market, primarily driven by supply and demand.

Free of Charge

A situation or service where no payment is required to obtain a good or service.

Rival

In economics, a rival good is one whose consumption by one person reduces its availability for another person.