A World Trade Organization publication calls comparative advantage "arguably the single most powerful insight in economics." Source: World Trade Organization, "Understanding the WTO," www. wto. org/english/thewto_e/whatis_e/tif_e /fact3_e. htm. The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors is known as ▼ . Referring to your answer above, what makes it such a powerful insight? A. It explains why if countries specialize and trade they will be better off. B. It explains why if individuals, firms, and countries specialize and trade they will be better off. C. It explains why larger firms and countries economically dominate smaller firms and countries. D. It is the basis for establishing an economic advantage over competing firms and countries.

The monthly demand equation for an electric utility company is estimated to be p equals 60 minus left parenthesis 10 superscript negative 5 baseline right parenthesis x, where p is measured in dollars and x is measured in thousands of killowatt-hours. the utility has fixed costs of $3 comma 000 comma 000 per month and variable costs of $32 per 1000 kilowatt-hours of electricity generated, so the cost function is upper c left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 32 x. (a) find the value of x and the corresponding price for 1000 kilowatt-hours that maximize the utility's profit. (b) suppose that the rising fuel costs increase the utility's variable costs from $32 to $38, so its new cost function is upper c 1 left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 38 x. should the utility pass all this increase of $6 per thousand kilowatt-hours on to the consumers?