Countries trade to achieve economies of scale in production.  Show in diagram(s) how nations (e.g. China and USA) can benefit from their specialisation in the production of goods and services with internal economies of scale (only a limited range of goods and services (e.g. China specialising in compact cars while USA specialising in large continental cars).

Q: The following graph shows the same PPF for Yosemite as before, as well as its initial consumption at…

A: Production possibility frontier shows different combination of two good or services that can be…

Q: Indicate True (T) or False (F) for the following questions, and explain your answer in 50 words…

A: Absolute Advantage: The absolute advantage arises when the country produces more with the given…

Q: An American worker can produce either 5 cars or 8 tons of grain a year. A Japanese worker can…

A: United States: Production of 5 cars requires 1 workers in one year Implies, 5 cars = 1 worker 1 car…

Q: Suppose that a firm producing furniture will be delivering 200 tables annually for many years to…

A: Given that labour and capital are the two inputs used in the production of furnitures. Therefore,…

Q: Assume that you have been hired by an International Organization to be consulted on various issues…

A: Trade: Exchange is characterized as the overall commercial centre of purchasing and selling…

Q: Which of the following statements is correct? Two countries cannot gain from specialization and…

A: True statement is “two countries cannot gain from specialization and trade if they have identical…

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: Which of the following is predicted by the models of intraindustry trade we have studied? Countries…

A: Answer: Correct option: C (Trade may decrease the price and increase the variety in the same…

Q: In the Heckscher - Ohlin model of international trade, assume that at current factor prices cloth is…

A: The Production Possibility Frontier (PPF) is a graphical depiction of all the conceivable…

Q: Specialization and trade When a country has a comparative advantage in the production of a good, it…

A: Production possibility curve is a graphical representation that shows various combinations of two…

Q: If country A can produce more of practically everything than can country B, then which of the…

A: Absolute Advantage occurs when a country can produce more of a particular good or service at a…

Q: Consider a hypothetical world with two countries: Country A and Country B. Each country has 45…

A: The objective of the question is to determine which good Country A will specialize in based on the…

Q: 3. Gains from trade Consider two neighboring island countries called Bellissima and Felicidad. They…

A: Given: Number of hours available=4 million   Rye Jeans Bellissima 6 12 Felicidad 4 16

Q: Suppose the production of chocolate and wine per hour of labor in Italy and France is as follows:…

A: a) From the given table we observe that using all its resources, Italy can produce either 8 bars of…

Q: Write the utility of country A here and provide a detailed explanation below. and the utility of…

A: To determine the utility of each country when the agents can trade, we must first find the…

Q: According to the Heckscher-Ohlin model, Brazil will have a comparative advantage in oranges if the…

A: The Hakcher-Oli Allen model is an economic introduction that they can produce the country that can…

Q: LABOR-INTENSIVE GOODS 10 a co 2 1 0 0 1 2 3 6 7 CAPITAL-INTENSIVE GOODS 8 Once trade begins, the…

A: The capital intensive goods requires investment over the good to make constant improvement. Usually,…

Q: If a scale economy is the dominant technological factor defining or establishing comparative…

A: The answer is as follows:-

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: a)Identify an example of absolute advantage relative to the United States from your data tables. Be…

A: (a) The U.S take a shorter time to produce the products like corn, citrus, apparel, and computer…

Q: Using the data presented in the table below answer the followings: a) which country has comparative…

A: A) In US, 100 apples = 200 oranges 1 apple = 200/100 = 2 oranges In Mexico,  450 apples = 150…

Q: Q)5 a)Because of their relatively small national economies, which of the following is most likely…

A: Answer: (5). Correct option: International trade Explanation: International trade is most likely…

Q: 1)  What does it mean if a country can produce something at a lower opportunity cost, and why would…

A: Opportunity cost is the money value of the next best alternative that is foregone by the individual…

Q: How do "comparative advantage" and "absolute advantage" influence international trade patterns, and…

A: Comparative Advantage refers to a situation where a country can produce a good at a lower…

Q: Which country has an absolute advantage in the production of beer and which country in butter

A: Absolute advantage occurs when a producer can provide a good or service in greater quantity for the…

Q: Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or…

A: Here, it is given that Alpha can produce either 18 oranges or 9 apples, while Beta can produce 16…

Q: coffee , while Lamponia has a comparative advantage in the Candonia has a comparative advantage in…

A: The PPF is also referred to as the production possibility curve (PPC). It is a key economic concept…

Q: We are supposed to create a PPF with manufactured goods on the y axis and agricultural goods on the…

A: The production possibility frontier of an economy is a model that illustrates the total output that…

Q: Freedonia Lamponia 16 16 14 14 12 12 PPF 10 10 8 8 PPF 4 2 2 + 4 8 10 12 14 16 2 4 8 10 12 14 16…

A: Comparative Advantage of a nation in producing certain goods is said to be the relative ability of…

Q: The two phrases/words that can be expressed in terms of each other are? opportunity costs and…

A: Q1: The two phrases/words that can be expressed in terms of each other are:Opportunity Costs and…

Q: According to the theory of comparative advantage, countries gain from trade because Group of answer…

A: Comparative Advantage refers to the ability of a nation to produce a particular good or a service in…

Q: Suppose that Maldonia and Lamponia agree to trade. Each country focuses its resources on producing…

A: A country having a lower cost of opportunity when compared to its partners of trading is known to…

Q: Assume that Trinbago is a small country that produces wine and motor vehicles, where motor  vehicles…

A: The Heckscher-Ohlin (H-O) trade model is an economic theory that explains patterns of international…

Q: Standard trade Model When comparing the agricultural sectors of the USA and the UK, we can analyze…

A: The standard trade model, also known as the neoclassical trade model or the Ricardian model, is an…

Q: In a PPC graph, if free trade makes the budget line become flatter and the comparative advantage…

A: This problem focuses on understanding the impact of free trade on a country's terms of trade, it's…

Q: Suppose countries A and B produce and consume (assuming convex preferences) apples and bananas using…

A: Given:Labor force=100  Unit cost for apples in country A=2 Unit cost for apples in country B =1…