Suppose a Producer Requires a Smaller Quantity of Inputs to Produce

question 175

Multiple Choice

Suppose a producer requires a smaller quantity of inputs to produce a good. Which of the following is correct?

• A)The producer should import that good.
• B)The producer has a comparative advantage in the production of that good.
• C)The producer has an absolute advantage in the production of that good.
• D)The producer has both an absolute and comparative advantage in the production of that good.

Identify major sources of federal revenue and understand the budget allocation to different expenditures.

Understand the historical and current tax rates, and predict the effects of future changes in tax legislation.

Recognize the role and impact of social security taxes and other payroll taxes.

Identify government transfer expenditures and their role in the federal budget.

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Definitions:

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit or benefits gained from additional investment will eventually decline.

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business or investment.

Cash Expenditures

Funds spent by a company or individual in cash form for operating activities, investments, and financing.

Explicit Costs

Direct, out-of-pocket payments made by firms for the use of inputs and resources in the production process.