The ability to produce a good at lower opportunity costs than another producer is known as
A) comparative advantage.
B) marginal cost production.
C) economies of scale.
D) absolute advantage.
A
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People specialize in activities in which they have a comparative advantage
A) if they know they are more productive than anyone else in the particular activity. B) only if they understand the logic of comparative advantage. C) when they expect to obtain more of whatever they want by doing so. D) only when all of the above are true.
Conceptually, a country's GDP equals the:
A. difference between the value of its final output and the value of the intermediate goods used to produce that output. B. sum of the value added at all stages of production. C. sum of the value of its final output and the value of the intermediate goods used to produce that output. D. sum of the value of all the intermediate goods used to produce final output.