According to the principle of comparative advantage, - countries should specialize in the production of goods for which they use more resources than their trading partners - countries with a comparative advantage in the production of every good need not specialize - countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners - countries should specialize in the production of goods for which they use fewer resources than their trading partners

Q: Country A can produce either 200 personal computers or 800 tons of potatoes with the same amount of…

A: (1). Country B has the absolute advantage in producing personal computers because it produces 300…

Q: Between two, the producer that requires a smaller quantity of inputs to produce a good     Has an…

A: In a market, producers cam gain different types of competitive advantage based on their…

Q: Suppose that each country completely specializes in the production of the good in which it has a…

A: The economic theory proposes that, if nations apply the standard of comparative advantage, the…

Q: England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50…

A: Resources are limited in any economy, but wants are limitless. As a result, a decision must be taken…

Q: The table below shows the maximum quantities of two goods that each country can produce. If the…

A: Given  Wakanda can produce either 8 tons of Vibranium or 2 tons of gold whereas Zamunda can produce…

Q: Explain briefly why a country can have an absolute advantage in the production of two goods, and yet…

A: In international market, trade between the countries take place on the basis of various approaches…

Q: When a country specializes in the production of a good, this means that it can produce this good at…

A: Opportunity cost evaluates the value of the next best alternative choice that is forgone when a…

Q: Y 100 Country A X Y 40 Country B 40 X 20 a) How much of Good Y will Country B produce if they…

A: Opportunity cost is value of next best alternative use of resources. In our context, opportunity…

Q: nd rates Imperfect competition Imperfect operation Government may restri

A: Comparative advantage is to the ability of a country for production of particular goods or services…

Q: If a country produces only two goods, then it is not possible to have a comparative advantage in the…

A: The exchange of products and services between businesses in several nations is referred to as…

Q: According to the concept of comparative advantage, a good should be produced in that nation where:…

A: Comparative advantage is the abiity of the nation to produce the good at a lower opportunity cost.

Q: While different natural resources and the theory of comparative advantage can explain many trade…

A: International trade refers to the exchange of goods and services between countries across the world.…

Q: Suppose that country A using one unit of labor can produce 80 pounds of apples or 20 pounds of…

A: When manufacturing a specific good, agents in an economic model have a comparative advantage over…

Q: Suppose that a worker in Freedonia can produce either 6 units of corn or 4 units of wheat per year,…

A: The theory of comparative advantage explains why trade between nations is advantageous. It asserts…

Q: In Country T, it takes 10 resources to produce 1 ton of cocoa and 13.5 resources to produce 1 ton of…

A: It might be argued that if countries used the concept of comparative advantage to choose what…

Q: Suppose that Canada can produce 100,000 hockey sticks or 10,000 gallons of maple syrup in a typical…

A: The businesses, and producers are considered to be the suppliers who makes up the supply side of the…

Q: Suppose that each country completely specializes in the production of the good in which it has a…

A: In economics, the value of what you must give up in order to choose something else is referred to as…

Q: The United States imports televisions from Japan and Japan imports computer chips from the United…

A: Opportunity cost is the cost of producing one good in terms of other.  Comparative advantage is when…

Q: State what the theory of comparative advantage forecasts: When there are two countries A and B, and…

A: Comparative cost advantage theory was propounded by David Ricardo. This is an important theory of…

Q: Which of the following best explains the concept of "Comparative Advantage" in international trade?…

A: The exchange of goods, services, and capital across national borders is known as ‘international…

Q: Country X can produce 1,000 units of food and 2,000 units of clothes. Country Y can produce 1,000…

A: Country X can produce 1000 units of food and 2000 units of clothes.  Country X's opportunity cost of…

Q: The U.S. can produce 100 pounds of beef or 10 cars; in contrast Germany can produce 40 pounds of…

A: As given,

Q: Which of the following BEST describes comparative advantage?

A: Opportunity-cost plays the main role in comparative-advantage. In economics, opportunity-cost is…

Q: According to the concept of comparative advantage, a good should be produced in that nation where:…

A: When a participant could generate anything at a cheaper price than someone else individual has a…

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.