If Prices Are Too ________, the Supply Will ________ Demand

question 48

Multiple Choice

If prices are too ________, the supply will ________ demand.

• A) High, exceed
• B) High, be less than
• C) Low, exceed
• D) Low, be more than
• E) None of the above

Comprehend the role of diversification in managing unsystematic risk in a portfolio.

Understand the concept of base-rate information and its significance in decision-making.

Recognize the impact of heuristics, such as the availability heuristic, on judgment and decision-making processes.

Identify errors in reasoning and judgment, such as overlooking base-rate information or the influence of representativeness heuristic.

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Definitions:

Comparative Advantage

The capacity of an entity, whether a single person, a corporation, or a nation, to create a product or offer a service more cost-effectively in terms of foregone opportunities than its competitors.

Low Opportunity Cost

A situation where the cost of foregoing the next best alternative is relatively minimal when choosing one option over another.

Computer Software

Programs and operating information used by a computer to perform specific tasks.

Law Of Comparative Advantage

is an economic principle that states countries (or entities) gain when they produce goods and services for which they have a lower opportunity cost, leading to more efficient global production.