Yvonne and Ken Own and Operate Deluxe Housecleaning Service

question 7

Multiple Choice

Yvonne and Ken own and operate Deluxe Housecleaning Service. Which of the following is a qualitative factor associated with dropping carpet cleaning from their current line of services?

• A) The timeliness with which they can provide other cleaning services
• B) The quality of their current carpet cleaning equipment
• C) The potential effect on demand for their other services
• D) The lost revenue from current customers

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Definitions:

Gains from Trade

The net benefits that parties obtain by voluntarily exchanging goods or services in markets.

Comparative Advantage

The ability of an individual or country to produce a good or service at a lower opportunity cost than others.

Production Possibility Curve

A graph that shows the maximum number of possible units a company can produce of two products given a set of inputs, reflecting the trade-off and opportunity cost of producing one product over another.

Trade

The action of buying, selling, or exchanging goods and services between people, firms, or countries.