Figure 3-8 -Refer to Figure 3-8.Chile Has a Comparative Advantage in the Comparative

question 149

Multiple Choice

Figure 3-8

-Refer to Figure 3-8.Chile has a comparative advantage in the production of

• A) coffee and Colombia has a comparative advantage in the production of soybeans.
• B) soybeans and Colombia has a comparative advantage in the production of coffee.
• C) both goods and Colombia has a comparative advantage in the production of neither good.
• D) neither good and Colombia has a comparative advantage in the production of both goods.

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Definitions:

Inflation

The rate at which the average cost of goods and services ascends, leading to a decrease in monetary value over time.

Creditors

Individuals or institutions that lend money or extend credit to others, expecting repayment in the future with interest.

Debtors

Individuals or entities that owe money to another entity, typically as a result of borrowing funds.

Business Owners

Individuals who legally possess a company, assume major risks, and enjoy the benefits from its operation and growth.