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(Table: Sales and Payments) Suppose that the price of the manufactured good rises by 20% with no change in the price of the agricultural good. Wages in both sectors rise by 10%. Which of the following is the correct ordering (from highest to lowest) of changes in the real wage, real rental on capital, and real rental on land?
Absolute Advantage
The capability of a country, entity, or individual to produce a good or service more efficiently than competitors, using fewer resources.
Cars
Motor vehicles with four wheels typically used for transportation of people rather than goods.
Trucks
Heavy vehicles used for transporting goods and materials over land.
Opportunity Cost
The cost of forfeiting the next best alternative when making a decision, representing the benefits missed when choosing one option over another.
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