When Productive Activity Is Organized According to Comparative Advantage

question 73

Multiple Choice

When productive activity is organized according to comparative advantage,

• A) there is a decrease in the amount of goods and services that an economy can gain from its resources.
• B) there is an increase in the amount of goods and services that an economy can gain from its resources.
• C) there is no change in the amount of goods and services that an economy can gain from its resources.
• D) the amount of goods and services that an economy can gain from its resources may increase or decrease.
• E) there is a decrease in the quality of the goods and services produced in the economy.

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Definitions:

Economic Profit

The total revenue of a business minus both the explicit and implicit costs, providing a more complete picture of a company's financial health.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices.

Total Cost

The complete cost of production, including both fixed and variable costs.

Efficient Allocation

The optimal distribution of resources among different uses, ensuring that resources are utilized in a way that maximizes overall benefit or utility.