The ability to compete and participate in the global market is best described by which of the following terms?

• A. Opportunity cost
• B. Comparative advantage
• C. Scarcity
• D. Marginal utility

Answer: (B)

Verified step by step guidance

1. Understand the concept of 'comparative advantage' in microeconomics, which refers to the ability of a party (an individual, firm, or country) to produce a good or service at a lower opportunity cost than others.
2. Recognize that 'opportunity cost' is the value of the next best alternative foregone when making a decision, which is a key component in determining comparative advantage but not the term itself.
3. Note that 'scarcity' refers to the limited nature of resources, which is a fundamental economic problem but does not specifically describe the ability to compete globally.
4. Understand that 'marginal utility' relates to the additional satisfaction gained from consuming one more unit of a good or service, which is unrelated to global market competition.
5. Conclude that the term best describing the ability to compete and participate in the global market is 'comparative advantage' because it explains how entities specialize and trade based on lower opportunity costs.