Given the information in the table below:Unit labour requirementsHomeForeignd.Cloth1060O a.Home has a comparative advantage in cloth.O b. neither country has a comparative advantage in cloth.O c.e.Widgets2030Home has a comparative advantage in both cloth and widgets.neither country has a comparative advantage in widgets.Foreign has a comparative advantagen cloth.

Absolute advantage refers to the ability of a country, individual, or firm to produce more output of…

Given the information in the table below: Unit labour requirements Widgets Home Foreign Cloth 10 60 C. O d. Oe. 20 30 a. Home has a comparative advantage in cloth. O b. neither country has a comparative advantage in cloth. Home has a comparative advantage in both cloth and widgets. neither country has a comparative advantage in widgets. Foreign has a comparative advantagen cloth.

Given the information in the table below: Unit labour requirements Widgets Home Foreign Cloth 10 60 C. O d. Oe. 20 30 a. Home has a comparative advantage in cloth. O b. neither country has a comparative advantage in cloth. Home has a comparative advantage in both cloth and widgets. neither country has a comparative advantage in widgets. Foreign has a comparative advantagen cloth.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following statements is true? A country that has the absolute advantage in producing a good also has the comparative advantage in producing that good. The country with the higher opportunity cost of producing a good has the comparative advantage in producing that good. O There are mutually beneficial gains from trade if opportunity costs differ. A country can have a comparative advantage in the production of all goods.
In a two-country, two-product world, the statement 'Germany enjoys a comparative advantage over France in cars relative to ships' is equivalent to O a. a. Germany having a comparative advantage over France in cars and ships. O b. France having a comparative disadvantage compared to Germany in cars and ships. O c. France having no comparative advantage over Germany. O d. France should produce cars. O e. France having a comparative advantage over Germany in ships. L
7. What is the law of comparative advantage? According to the law of comparative advantage, what should be the distin- guishing characteristics of the goods a nation produces? What should be the distinguishing characteristics of the goods a na- tion imports? How will international trade influence people's production levels and living standards? Explain. 15
Which of the following is proof that international trade is beneficial? O the fact that different regions in the United States specialize in different products O the international trade in exotic products O the sheer volume of trade between very different nationsswer text provided. O the concept of absolute advantage
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Candonia has a comparative advantage in the production of , while Desonia has a comparative advantage in the production of . Suppose that Candonia and Desonia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of
Cloth Widgets Home 10 20 Foreign 60 30 Page < 2 5. Given the information of the units of labor required to produce one unit of each good (not MPL) in the table above A. Home has a comparative advantage in cloth. B. neither country has a comparative advantage in cloth. C. Foreign has an absolute advantage in both cloth and widgets. D. Foreign has a comparative advantage in cloth. 6. From the four prices below, what could be the relative price of cloth to widget if trade happens? A. 1/6 B. 1/3 C. 1/3 D. 5/2 7. Suppose that the relative price of cloth to widgets is 1. What is the ratio of real wage in Home to Foreign when trade happens? A. I 1) 10 8. According to the Ricardian model, the consumption possibility frontier hp
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has an absolute advantage in the production of barley, and has an absolute advantage in the production of alfalfa. bushels of barley, whereas Megan's opportunity cost of producing 1 bushel of opportunity cost of producing alfalfa than Megan, has a has a comparative advantage in the production of barley. Larry's opportunity cost of producing 1 bushel of alfalfa is alfalfa is bushels of barley. Because Larry has a comparative advantage in the production of alfalfa, and
Which country has comparative advantage in the production of washing machines and automobiles?
Suppose that Poland and Wales both produce ale and glass. Poland's opportunity cost of producing a pane of glass is 4 kegs of ale while Wales's opportunity cost of producing a pane of glass is 12 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell thatWales has a comparative advantage in the production of glass andPoland has a comparative advantage in the production of ale. Suppose that Poland and Wales consider trading glass and ale with each other. Poland can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Poland to gain from trade? Check all that apply. 8 kegs of…
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