According to the concept of comparative advantage, a good should be produced in that nation where: its domestic opportunity cost is least. money is used as a medium of exchange. its domestic opportunity cost is greatest. the terms of trade are maximized.

According to the concept of comparative advantage, a good should be produced in that nation where: its domestic opportunity cost is least. money is used as a medium of exchange. its domestic opportunity cost is greatest. the terms of trade are maximized.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter2: Scarcity And Opportunity Costs

Section: Chapter Questions

Problem 13E

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Question

According to the concept of comparative advantage, a good should be
produced in that nation where:
its domestic opportunity cost is least.
money is used as a medium of exchange.
its domestic opportunity cost is greatest.
the terms of trade are maximized.

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According to the concept of comparative advantage, a good should be produced in that nation where: its domestic opportunity cost is greatest. money is used as a medium of exchange. its domestic opportunity cost is least. the terms of trade are maximized
Which of the following BEST describes comparative advantage? Country A can produce a product at a lower opportunity cost than Country B Country A can produce more of a product than Country B Country A has a currency worth more than the currency of country B Country A uses a smaller amount of a resource to produce than Country B
According to the "Principle of Comparative Advantage," a country should specialize in producing a good or service if it has:a) The highest opportunity cost b) The lowest opportunity cost c) The highest production cost d) The lowest production cost
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in details, discuss those five limitations of comparative advantage: Transport costs and rates Imperfect competition Imperfect operation Government may restrict trade It doesn't measure any dynamic advantage. It only measures the static advantage
Suppose that Country A can produce 6060 bags of sugar or 3030 bags of flour per worker hour. Country B can produce 4040 bags of sugar or 1010 bags of flour per worker hour. Assume that there is 100%100% specialization, and each country has 55 worker hours.If each country specializes in its comparative advantage, calculate the quantity of the good that Country B should produce.
Country X can produce 1,000 units of food and 2,000 units of clothes. Country Y can produce 1,000 units of food and 1,000 units of clothes. In order to maximize trade according to the principles of comparative advantage, country X should produce food and import clothes from country Y. country Y should produce food and import clothes from country X. country X and Y should produce both food and clothes to meet their own needs. country Y should produce both food and clothes, and import additional clothes from country X.
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home cheese alc=1hr/kg wine alw=2hrs/gallon foreign cheese alc*=6hrs/kg wine alw*=3hrs/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign* ) country has an absolute advantage? Show in which product does the Home (Foreign* ) country has comparative advantage? Calculate the relative supply (RS) With trade, what is the equilibrium range that the relative price of cheese to wine will settle? Supposing that the intersection of RS and RD occurs at PC /PW = 1, what is the implication?
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