Is the ability to produce a good at a lower opportunity cost?

Is the ability to produce a good at a lower opportunity cost?

Comparative advantage refers to the ability to produce goods and services at a lower opportunity cost, not necessarily at a greater volume or quality.

What is likely to occur if efficiency is exhibited?

When the economy exhibits productive efficiency, it is producing the maximum outpot with the variable resources and technology. It’s using all its resources to produce goods; its resources are fully employed, and nore are unemployed. The increased productive capabilites of an economy.

What do economists mean when they say an economy’s PPF has shifted to the left?

PPF has shifted to the left. Points that lie outside (or beyond) the PPF are. unattainable. The economy moves from point A, where it produces 100 units of X and 200 units of Y, to point B where it produces 200 units of X and 150 units of Y.

When a product can be produced at a lower opportunity cost it is referred to as?

Comparative advantage refers to the ability to produce goods and services at a lower opportunity cost, not necessarily at a greater volume or quality. Comparative advantage is a key insight that trade will still occur even if one country has an absolute advantage in all products.

Why does the law of increasing opportunity cost occur?

The law of increasing opportunity cost states that when a company continues raising production its opportunity cost increases. Specifically, if it raises production of one product, the opportunity cost of making the next unit rises. This occurs because the producer reallocates resources to make that product.

What is opportunity cost defined as?

How is opportunity cost defined in everyday life? “Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up,” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.

When one nation can produce a product at lower cost relative to another nation it is said to have?

Comparative advantage
Comparative advantage refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another. Even if one country has an absolute advantage in producing all goods, different countries could still have different comparative advantages.

What is a decreasing opportunity cost?

When the PPC is a straight line, opportunity costs are the same no matter how far you move along the curve. When the PPC is concave (bowed out), opportunity costs increase as you move along the curve. When the PPC is convex (bowed in), opportunity costs are decreasing.