Despite specialization and comparative advantage, household production still exists because for some households
A)the opportunity cost of production at home is greater than the cost of purchasing the good in the market
B)production at home is less costly than purchasing the good in the market
C)the value of home production exceeds the sunk cost of home production
D)the value of home production is ignored
E)food and clothing expenditures represent a small portion of their total budget

Question

Quizplus · Accepted Answer

Household production still exists when it is less costly for households to produce goods at home than to purchase them in the market, making it a more economically viable option.

Despite Specialization and Comparative Advantage, Household Production Still Exists Because