The O-Ring Theory Places Emphasis on

question 1

Multiple Choice

The O-ring theory places emphasis on

• A)education of the labor force.
• B)skill complementarities.
• C)purchases of machinery and equipment by firms.
• D) None of the above.

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Definitions:

Comparative Advantage

The capability of a person, business, or nation to generate a product or offer a service with a lesser opportunity cost compared to its rivals.

Absolute Advantage

The ability of an individual, company, or country to produce more of a good or service with the same amount of resources as others.

Production Possibilities

Production possibilities involve the various combinations of different goods or services that can be produced in a given economy with available resources and technology, illustrated by the production possibilities frontier.

Production Possibilities Curve

A graphical representation that shows the various combinations of two products that an economy can produce using all its resources efficiently.