3 Questions
Which concept refers to the value of the next best alternative that is given up when making a choice?
Opportunity cost
Which concept refers to the ability of individuals or countries to produce a good or service at a lower opportunity cost than others?
Specialization
Which concept refers to the amount of output produced per unit of input?
Productivity
Study Notes
Opportunity Cost
- Refers to the value of the next best alternative that is given up when making a choice
- Represents the trade-off or sacrifice made when choosing one option over another
Comparative Advantage
- Refers to the ability of individuals or countries to produce a good or service at a lower opportunity cost than others
- Enables specialization and efficient allocation of resources
Productivity
- Refers to the amount of output produced per unit of input
- Measures the efficiency of a production process or system
Test your knowledge of basic economic concepts such as trade, opportunity cost, specialization, productivity, and price incentives with this quiz. Challenge yourself and see how well you understand these fundamental principles that shape our economy.
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