Which of the Following Best Describes Comparative Advantage

question 29

Multiple Choice

Which of the following best describes comparative advantage?

• A)Using the fewest number of resources to produce a given amount of output.
• B)It is the same as absolute advantage.
• C)Being able to produce more output than any other country.
• D)Forgoing the fewest units of one product to produce a unit of another product.
• E)Having the largest number of resources compared to other countries.

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Definitions:

Tax Deductible

Expenses that can be subtracted from gross income to reduce taxable income.

Contract Interest Rate

The pre-determined rate at which interest is calculated on a loan or financial agreement.

Face Value

The original cost of a bond or stock, as indicated on the certificate; it is also known as the nominal or par value.

Above Face Value

A situation where a financial instrument, such as a bond, is traded for more than its original issue price.