ECONOMICS
OPPORTUNITY COST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
In market economy, individuals provide goods & services to others & receive goods & services in return.
|
|
|
Comparison of costs & benefits of doing something.
|
|
|
By dividing tasks & trading, people get more of what they want thru trade than they could if they tried to be self-sufficient.
|
|
|
None of the above
|
Detailed explanation-1: -Gains from trade are commonly described as resulting from: specialization in production from division of labor, economies of scale, scope, and agglomeration and relative availability of factor resources in types of output by farms, businesses, location and economies. a resulting increase in total output possibilities.
Detailed explanation-2: -Gains from trade can be calculated by adding up consumer and producer surplus. Gains of trade will be at the maximum when a country produces the lowest opportunity cost product relative to other producers.
Detailed explanation-3: -The average ratio of dynamic gains to steady-state gains is 60.2 percent and varies from a minimum of 60.1 percent to a maximum of 60.5 percent (see Figure 3b).