What are comparative and absolute advantage? Why is comparative advantage, in your opinion, relevant for international trade?
What are comparative and absolute advantage? Why is comparative advantage, in your opinion, relevant for international...
What does the term "absolute advantage" mean? What is the “principle of comparative advantage”? Explain why the principle of comparative advantage is relevant to international trade policy. Is everyone better off when trading is allowed?
Economic theory suggests that international trade is primarily due to absolute advantage. strategic advantage. comparative advantage. technical advantage.
International trade is considered to be an important component of the economy. Explain how the Theory of Absolute Advantage, Theory of Comparative Advantage and the Hecksher-Ohlin Theory determine what a nation should produce for trade. Some economists argue that countries must have free, unregulated trade, do you agree? Why or why not?
Which economic theory best explains current international trade and why? a) Mercantilism b) Absolute Advantage c) Comparative advantage d) Factors Proportions Theory e) International Product Life Cycle f) Porter's Theory of National Competitive
The following are correct statements about Comparative and Absolute Advantage, EXCEPT: a) Absolute Advantage means being able to produce more with the same economic resources. b) Comparative Advantage means being able to produce with the lowest opportunity cost. c) Absolute Advantage does not imply Comparative Advantage. d) Efficiency and Optimality can be attained if we specialize and trade according to our Absolute Advantages. (The answer is not C)
9. Comparative advantage is defined in terms of: efficiency. absolute advantage. opportunity cost. specialization. 10. David can wash four cars in one hour or cut two lawns. Ralph can wash three cars in one hour or cut two lawns. David's opportunity cost for cutting one lawn is car washes, and Ralph's opportunity cost for cutting one lawn is car washes. a. 2; 1.5 4; 3.5 1.5; 2 d. 3.5; 4 11. Gains from trade are based on rather than: opportunity...
Comparative Advantage and International Trade Portfolio The production possibilities curves above show all the possible combinations of helicopters and scooters that two towns, Millerville and Jamestown, can create using equal amounts of resources. Explain which country has the absolute advantage in the production of helicopters. Using the concept of opportunity cost that you learned in this lesson, explain which country has the comparative advantage in the production of scooters. You may include a table for your explanation. (Hint: Is this...
1. Why does comparative advantage matter more than absolute advantage for trade? 2. Draw a production possibilities frontier curve. Illustrate the set of points that is feasible, the set of points that is efficient, the set of points that is inefficient, and the set of points that is not feasible. If you prefer not to draw then explain. 3. Explain why seniors often earn lower grades in their last semester before graduation (hint: incentive problem).
Countries with the absolute advantage in no products will not be able to engage in international trade. True False
Explain how absolute advantage differs from comparative advantage. (4 marks)