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Trade Allows Each Person to Specialize in the Activities He

question 182

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Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.


Definitions:

Marginal Cost

A measurement of the cost incurred by producing one additional unit of a product or service.

Average Variable Cost

The per-unit cost that varies, calculated through the division of total variable costs by the quantity of products made.

Economic Profits

The financial gain made in a transaction after accounting for both explicit and implicit costs.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the average cost per unit of output.

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