The principle of comparative advantage says that
a. every individual should specialize in producing that good for which the absolute cost is the smallest
b. the output of society as a whole will be the greatest if every individual specializes in producing that commodity for which his opportunity cost is the smallest
c. monopoly power is gained by specializing in a large market and reducing costs
d. monopoly power is gained by specializing in a small market and producing a differentiated product
e. your financial investments should be "compared" in a common fashion to determine your maximum advantage
B
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Which is not one of the criteria necessary for a commodity to make a suitable medium of exchange?
A) It should be of standardized quality. B) It should be valuable relative to its weight. C) It should be durable. D) It should have intrinsic value.
From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the:
A. Marginal cost of more insurance coverage is negative B. Marginal benefit of more insurance coverage is greater than zero C. Marginal benefit of more insurance coverage is greater than the marginal cost D. Marginal cost of more insurance coverage is equal to the payment for the extra coverage