The Law of Comparative Advantage Says That a Person Should

question 91

Multiple Choice

The law of comparative advantage says that a person should produce a good if he or she:

• A)has the greatest desire to consume that good.
• B)has the lowest opportunity cost of producing that good.
• C)has an absolute advantage in a related activity.
• D)has a comparative advantage in a related activity.
• E)is equally good at producing this good as someone else is.

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Definitions:

Psychological Factors

Elements of human behavior such as motivation, perception, learning, beliefs, and attitudes that influence consumers' buying decisions.

Buying Decisions

The process by which consumers identify their needs, gather information, evaluate alternatives, and make the purchase decision.

Benefits

Advantages or positive outcomes that an individual or organization receives from a product, service, or policy.

Prospective Customer

is an individual or organization potentially interested in purchasing a company's products or services, often targeted in marketing efforts.