Which of the Following Best Describes the Principle of Comparative

question 80

Multiple Choice

Which of the following best describes the principle of comparative advantage?

• A) Some people can produce the same good better than other producers can.
• B) Someone has the ability to produce the same good using fewer inputs than another producer.
• C) Someone has the ability to produce the same good for the lowest opportunity cost.
• D) To produce more of one good, people have to produce less of another good.

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Definitions:

Black Market

An illegal trade of goods or services that are not sanctioned by the authority, often to avoid taxes or because the goods are prohibited.

Gray Market

involves the trade of legal goods through unauthorized, unofficial, or unintended channels, usually not illegal but discouraged by manufacturers.

Resource Market

The marketplace where resources or inputs (like labor, capital, and raw materials) used to produce goods and services are bought and sold.

Excess Burden

Refers to the cost to society created by market inefficiency, which occurs when supply and demand are out of equilibrium.