The ability of one producer to produce a good at a lower opportunity cost than another producer is called
A) a normative statement.
B) a zero-sum game.
C) absolute advantage.
D) comparative advantage.
E) the law of increasing relative cost.

Question

Quizplus · Accepted Answer

This definition is describing comparative advantage, which is the ability to produce a good at a lower opportunity cost than another producer. Absolute advantage refers to being able to produce a good using fewer resources, while the law of increasing relative cost states that as production of one good increases, the opportunity cost of producing an additional unit of that good increases. Normative statements involve value judgments rather than objective facts, and a zero-sum game is one where one person's gain is equivalent to another's loss.

The Ability of One Producer to Produce a Good at a Lower