The Ability of One Producer to Create More of a Good

question 160

Multiple Choice

The ability of one producer to create more of a good than another producer using the same quantity of resources is called

• A) comparative advantage.
• B) absolute advantage.
• C) a positive-sum game.
• D) gains from trade.
• E) the law of increasing relative cost.

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Definitions:

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Productive Economic Resource

Assets or inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit.

Use Of Money

The various purposes for which money is used in an economy, including spending, saving, and investing.