A Country with a Comparative Advantage in Producing Computer Chips

question 32

Multiple Choice

A country with a comparative advantage in producing computer chips

• A) Has a lower opportunity cost of producing computer chips than its trading partners.
• B) Can produce computer chips with fewer resources than its trading partners.
• C) Can achieve better terms of trade in selling computer chips than its trading partners.
• D) Has greater capacity to produce computer chips, given its resources, than do its trading partners. Comparative advantage means one can produce a particular good at a lower opportunity cost than others.

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Definitions:

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, typically detailing income, assets, liabilities, and equity at a specific point in time.

Default

Failure to make payments on a loan.

Loan Payments

Periodic payments made towards the balance and interest of a loan, following a predefined schedule until the loan is fully repaid.

Chapter 7

A provision under U.S. bankruptcy law for liquidating a debtor's assets to pay off creditors.