Under Certain Assumptions,the Model of Comparative Advantage Predicts That Maximum

question 8

Multiple Choice

Under certain assumptions,the model of comparative advantage predicts that maximum output can be achieved if each person produces goods or services where

• A) all factors of production are used in equal amounts.
• B) the most equitable distribution is created.
• C) the government intervenes the least.
• D) firms maximize their revenues
• E) he or she has the lowest opportunity cost.

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Definitions:

High Cost

A term describing situations or items that require a significant amount of resources or money to obtain or maintain.

Marginal Products

The additional output resulting from the use of one more unit of a variable input while holding other inputs constant.

Separating Equilibrium

A condition in game theory or economics where different types of participants are sorted into different equilibria based on their characteristics or type.

Pooling Equilibrium

A situation in game theory where different types with different characteristics choose the same strategy, making it impossible to distinguish between them based on their actions.