What concept describes the situation where the increase in the production of one good leads to a decrease in the potential production of another due to limited resources? A) Comparative Advantage B) Opportunity Cost C) Economies of Scale D) Market Equilibrium

What concept describes the situation where the increase in the production of one good leads to a decrease in the potential production of another due to limited resources? A) Comparative Advantage B) Opportunity Cost C) Economies of Scale D) Market Equilibrium

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter2: Production Possibilities Frontier Framework

Section: Chapter Questions

Problem 8WNG

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

What concept describes the situation where
the increase in the production of one good
leads to a decrease in the potential
production of another due to limited
resources?
A) Comparative Advantage
B) Opportunity Cost
C) Economies of Scale
D) Market Equilibrium

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