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If They Bake Only Cakes,in a Single Day George Can

question 62

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If they bake only cakes,in a single day George can bake 10 cakes,and Greta can bake 5 cakes.If they make only pies,in a single day George can bake 10 pies,while Greta can bake 4 pies.We know that _____ has an absolute advantage and a comparative advantage in making _____.


Definitions:

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually pay.

Excess Demand

A situation where the quantity demanded of a good exceeds the quantity supplied at the current price.

Compensating Variation

Compensating variation is an economic concept that measures the amount of money one would need to reach their original level of utility after a price change or economic policy impact.

Price Increase

A rise in the cost of a good or service.

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