The ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals.

Related MCQs

• Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad. The export revenue of these firms would rise if the foreign demand is:
• Country A has 5000 units of labor. It takes 50 units of labor to produce one computer and 1 unit to create a Web page. What is the opportunity cost of a Web page in terms of computers?
• Country A and Country B produce computers and Web sites. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 At which of the following relative prices (computers in terms of Web sites) will Country B produce both goods under free trade?
• The ability to produce more of a good or service than competitors, using the same amount of resources is
• What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world?
• The opportunity cost theory assumes that
• Opportunity cost theory
• The opportunity cost of producing computers in terms of Web pages is 50 in Country A and is 10 in Country B. Based on the Ricardian model, what can we conclude about the pattern of trade?
• Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country’s:
• Country A has 100 units of labor and Country B has 200 units of labor. Both countries produce computers and Web pages. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 Assume free trade exists and that the relative price is such that both countries specialize completely in the industry in which they have a comparative advantage (neither country produces both goods). The supply of computers relative to Web pages will be: