An individual has a comparative advantage in the production of a particular good if she can produce it at a lower opportunity cost than other individuals. An individual has an absolute advantage in the production of a good if she can produce more of that good than another individual. using comparable amounts of time. raw materials and effort

Answers to Review Questions 1. Your friend probably means that your tennis game will improve faster if you take solo private lessons instead of group lessons. But private lessons are also more costly than group lessons. So those people who don' t care that much about ho rapidly they improve may do better to take group lessons and spend what they save on other things

According to Say's Law, Supply Creates Its Own Demand as Prices move to balance Demand with Aggregate Supply

Increases Affect Aggregate Supply?OSt How Do Growth in Potential Output and Ce

ECNOMICS Openness of Different Economies, 1997

ECNOMICS Economic Growth Is Key to Long- Term Living Standards

ECENOMIC S We Now Turn to Money: Its Demand and the Role of Banks in Its Supply

ECENOMIC S Business fluctuations have been a Persistent Feature of Capitalism

ECENOMIC S Gross domestic product can be measured Either as(a) a Flow of Final Products or Equivalently, as(b) a Flow of Costs 1-153

ECENOMIC S Lorenz Curve shows Income Inequality T137 Figure 19-1 100 Curve of absolute equality Deviation fror absolute equality