2) The principle of comparative advantage states that individuals, firms, and na

Question

2) The principle of comparative advantage states that individuals, firms, and national economies should produce 1) what they are able to produce most efficiently 2) only those things that they can produce more efficiently than everyone else 3) whatever they want for their own consumption 4) enough necessities to ensure self-sufficieney 5) none of the above 3) In modern economies- - _. 1) all prices are very flexible 2) some prices are very flexible while others are not 3) no prices are very flexible 4) prices become less flexible as they increase 5) none of the above 4) All other things being equal, an additional unit of capital invested in a capital-rich economy generally should lead to rease in output compared with a unit of capital invested in a capital- poor economy. 1) a smaller 2) a larger 3) about the same sized 4) an unpredictable 5) none of the above 5) Autonomous consumption is 1) the sum of consumption that depends on the level of income and consumption that does not depend on income 2) the part of consumption that depends on the level of income 3) the part of consumption that does not depend on income 4) the relationship between consumption spending and the level of income 5) none of the above

Explanation / Answer

Question 2

The Principle of Comparative Advantage states that individuals, firms, and national economies should produce those goods and services which they can produce at lower opportunity cost relative to everyone else.

Thus, none of the given options pertains to comparative advantage.

Hence, the correct answer is the option (5).

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