That each individual should engage in economic activities in which he or she is relatively most efficient is an application of the concept of
A)competition.
B)absolute advantage.
C)scarcity.
D)comparative advantage.

Question

Quizplus · Accepted Answer

The concept of engaging in economic activities based on relative efficiency is known as comparative advantage. This means that an individual should specialize in producing goods and services for which they have a lower opportunity cost compared to others. By doing so, they can generate more output with fewer resources, which leads to higher overall productivity and economic growth. This principle is based on the idea of trade-offs and scarcity, as individuals have limited resources and must allocate them efficiently to maximize their well-being. It is not based on absolute advantage, which refers to the ability to produce a good or service with fewer resources than others, nor competition, which is a market mechanism that incentivizes firms to improve their efficiency and quality to attract customers.

That Each Individual Should Engage in Economic Activities in Which