The Money Price of a Good Is That Price

question 245

Multiple Choice

The money price of a good is that price

• A)expressed in constant 2005 dollars.
• B)expressed in purchasing power against a common item like bread.
• C)expressed in today's dollars.
• D)that would clear the market.

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Definitions:

Comparative Advantage

The ability of an individual, firm, or country to produce a certain good or service at a lower opportunity cost than competitors.

International Specialization

The economic strategy where countries focus on the production and export of goods and services for which they have a comparative advantage.

Trading Possibilities Line

A line that shows the different combinations of two products that an economy is able to obtain (consume) when it specializes in the production of one product and trades (exports) it to obtain the other product.

Cost Ratios

These ratios compare different types of costs to each other or to sales in order to evaluate a company's financial efficiency and profitability.