Which of the Following Is a Likely Result of the Dramatic

question 326

Multiple Choice

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

• A) an increase in the demand for computers
• B) a decrease in the supply of diskettes
• C) an increase in the supply of computers
• D) an increase in the quantity supplied of computers

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Definitions:

Trade Barriers

Measures such as tariffs, quotas, and regulations that governments use to control the amount and type of goods and services imported or exported.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors, underpinning international trade theories.

Absolute Advantage

The ability of an entity to produce a good or service at a lower cost per unit than other competitors using the same amount of resources.

Trade Surplus

A situation where a country's exports exceed its imports over a given period, indicating a positive balance of trade.