Comparative Advantage Is Found by Comparing the

question 40

Multiple Choice

Comparative advantage is found by comparing the

• A) relative costs of production in each country.
• B) absolute costs of production in each country.
• C) labor hours used to produce a standardized product in each country.
• D) level of interest rates in each country.
• E) transportation and shipping capabilities of each country.

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Definitions:

Sugar

A sweet-tasting, soluble carbohydrate used commonly as a sweetener in food and drinks.

National Security

Measures and policies implemented by a nation to protect against threats to its sovereignty, safety, and economic well-being.

Silicon Chips

Small pieces of semiconductor material, typically silicon, used in the manufacturing of electronic circuits and devices.

Quota Rent

The difference between the demand price and the supply price at the quota limit; this difference, the earnings that accrue to the license-holder, is equal to the market price of the license when the license is traded.