Happyland can produce 40 tones of marshmallows or 20 tones of chocolate in a year. Friendshipland can produce 80 tones of marshmallows or 40 tones of chocolate in a year. Can these countries benefit from trade with each other based on specialization and comparative advantage? Yes No

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: In the no specialization-no trade case, country X produces and consumes 60 units of good A and 10…

A: What rate the commodities will be exchanged in the international trade it is given by classical…

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: True or False. Both Countries would be better off if they produced the good in which they have a…

A: Given:   Production per worker Car  Grain (in tons) United state 4 8 Japan 4 5 The total…

Q: ountry A can produce 20 units of wheat or 10 units of corn, while Country B can produce 15 units of…

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

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: The opportunity costs could be computed as: Aircraft Corn =1/500=0.002 air Beta =500/1=500 corn…

A: 1. Beta is specialized in Corn production because its opportunity cost is lower than Gamma in the…

Q: Consider two nations, Nation A and Nation B: "Excellent," the representative from Nation A says. "We…

A: The theory of comparative advantage suggests that countries should specialize in the production of…

Q: Which country has comparative at producing good x. How can you tell. Which country has a comparative…

A: Comparative advantage means that if a country can produce only two goods say computer and clothes if…

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: Suppose that a worker in Caninia can produce either 2 blankets or 8 meals per day, and a worker in…

A: To understand the decline in output, let us understand the backdrop of the situation before the…

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: If a country produces more food and electronics than another country does it have a comparative…

A: Theory of comparative advantage was given by David Ricardo. According to David Ricardo gains from…

Q: When two or more nations engage in free trade, how is the standard of livin mproved in the…

A: Free-trade is a situation where the participants of trade do not impose any restriction upon 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: Use the following data to explain the difference between absolute advantage (SMITH) and comparative…

A: Absolute advantage refers to the ability to produce more goods using same resources or same quantity…

Q: What is one possible price of capital-intensive goods (in terms of labor-intensive goods) that would…

A: In country A,  1 ton of capital-intensive goods  =200/200 =  1 ton of labor intensive good In…

Q: Because the two countries produce more rye and more jeans under specialization, each country is able…

A: Since you posted multiple questions, we will provide you the answer of first question. If you want…

Q: Two countries, Nicaragua and Argentina can both produce bananas and wheat. Their production…

A: PPC: Graphical representation of the combination of two goods that can be produced in the economy in…

Q: American worker takes 20 hours to produce one computer and 300 hours to produce an RV. A Japanese…

A: A American worker takes 20 hours to produce one computer and 300 hours to produce an RV A Japanese…

Q: Explain which product each of the countries should specialise in and export. Use the information…

A: The theory that states that there exists an advantage when the economy could be able to produce at a…

Q: uppose there are two states that do not trade: Iowa and Nebraska. Each state produces the same two…

A: Opportunity cost: When a firm picks an option then it has to foregone other options. And the…

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: Suppose that in an hour an American worker can produce 200 clothes or 20 cars, while a Brazillian…

A: The international trade can be beneficial if the theories support the requirements by a country. The…

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 following graphs show the production possibilities frontiers (PPFS) for Shenandoah and Rainier.…

A: A production possibility frontier (PPF) shows the maximum possible output combinations of two goods…

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: With Russia's and Ireland's biggest export, discuss the potential of a comparative advantage, and…

A: A comparative advantage exists when a country can produce a good or service at a lower opportunity…

Q: Create a diagram similar to Figure 1.4 in which demand in both countries is identical and trade…

A: International trade is the exchange of goods and services between different countries. It includes…

Comparative Advantage and Absolute Advantage Analysis

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