The ratio of one commodity price to the price of another commodity is called (the):
A)absolute advantage
B)relative commodity price
C)constant opportunity costs
D)increasing opportunity costs.

Question

Quizplus · Accepted Answer

The ratio of one commodity price to another commodity price is known as the relative commodity price. Options A, C, and D are incorrect because they do not relate to the concept of the ratio of two commodity prices. Absolute advantage refers to one country's ability to produce a product more efficiently than another country, constant opportunity costs mean the cost remains the same for each additional product produced, and increasing opportunity costs refer to the fact that as the production level increases, the opportunity cost of producing each additional unit rises.

The Ratio of One Commodity Price to the Price of Another