What is a chip?

Answer

Dear Ellen,

A chip (IC or integrated circuit) is a collection of electronic components that are contained in one housing (the black block in your photo). Before the invention of the IC, each component was soldered separately on a printed circuit board.
For example, an electronic component is a resistor that can attenuate an electric current, a transistor that can amplify or switch a current on and off, a capacitor that can hold a charge of current, etc.
Modern ICs can contain millions of transistors and be very complex.
You can find more information at:
http://nl.wikipedia.org/wiki/Ge%C3%AFntegreerde_circuit

Sincerely,