A Person Has a Comparative Advantage in Producing a Good

question 23

Multiple Choice

A person has a comparative advantage in producing a good if that person:

• A) Has higher productivity in producing it than anyone else has
• B) Can produce it at a lower opportunity cost than anyone else can
• C) Has less desire to consume that good than anyone else has
• D) Has more human capital related to that good than anyone else has

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Definitions:

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, including both interest payments and capital gains.

Bond Indenture

A legal and binding contract between a bond issuer and the bondholders, specifying the terms of the bond such as the interest rate, maturity date, and other conditions.

Flotation Costs

Expenses associated with issuing new stocks or bonds, including fees for underwriting services, legal counsel, and registration.

Venture Capitalist

An investor who provides capital to startup companies and small businesses with perceived long-term growth potential.