The Concept of "Comparative Advantage" Refers to the

question 5

Multiple Choice

The concept of "comparative advantage" refers to the

• A)ability of one region to produce a commodity at a lower opportunity cost than another region.
• B)ability of one region to produce a commodity with less labour input than another region.
• C)ability of one region to produce a commodity with fewer total inputs than another region.
• D)gains from international trade.
• E)terms of trade index.

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much of one currency can be exchanged for another currency.

Honduras

A country located in Central America, characterized by its rich culture, historical sites, and a diverse landscape that includes mountains, rainforests, and coastal beaches.

Nicaragua

A country located in Central America, known for its significant cultural heritage, geography, and political history.

Self-sufficient

The capacity of an individual, household, or community to meet their needs and sustain themselves without external assistance.