Consider the Opportunity Costs of Producing Goods X and Y

question 206

Multiple Choice

Consider the opportunity costs of producing goods X and Y that are listed for the four individuals above. Which person has a comparative advantage in producing good Y?

• A) Pramilla
• B) Sam
• C) George
• D) Lucas

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Definitions:

Technology Improvement

Enhancements or advancements in technology that lead to more efficient processes or better quality outcomes.

MC

Stands for Marginal Cost, which is the cost incurred by producing one additional unit of a good or service.

Output

The quantity of goods or services produced within a given time period by a firm, sector, or economy.

U-Shaped Marginal Cost

A graphical representation of the cost incurred to produce one more unit of a good, which decreases at first due to increasing returns but eventually increases due to decreasing returns.