Question

Rather than produce a wide array of goods and services, it is more efficient for economies to produce goods and services based upon ______.

A) Comparative advantage
B) Absolute advantage
C) Market demand
D) Consumer surplus

Answer 1

Rather than produce a wide array of goods and services, it is more efficient for economies to produce goods and services based upon Comparative advantage

Step-by-step explanation:

It is more efficient for economies to produce goods and services based upon comparative advantage. Unlike absolute advantage, where a country or individual can produce more of a good per unit of labor than another, comparative advantage means producing a good at a lower opportunity cost than others.

Specialization based on comparative advantage and engaging in trade allows for greater global production efficiency and higher levels of consumption for all, since it emphasizes the production of goods and services for which an economy is relatively more efficient compared to others. This is different from market demand and consumer surplus, which reflect the desires of consumers and the benefits they gain from paying less than they would be willing to pay, respectively.