The gains from specialization and trade are based on absolute advantage.   Question 4 options:   a) True   b) False

Q: A producer has a comparative advantage in a good if it is the lowest opportunity cost producer of…

A: It can be defined as a situation in which a particular individual or a producer is able to produce a…

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: 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: To say that countries gain from trade means that: a) if one country has an absolute advantage over…

A: Gains from trade refer to the benefits countries receive when they specialize in producing goods in…

Q: Analyze the following (2x2) matrix. Identify the countries having certain advantages. Moreover,…

A: The theory of Absolute advantage is created by Adam Smith. If a country produces more of a good than…

Q: Which of the following statements is not correct?   Trade allows for specialization.…

A: For trade to be occur minimum two parties are required.

Q: Which situation describes when mutually beneficial trade occurs?   Group of answer choices   Country…

A: On the international market, mutually beneficial trade refers to the situation when both the trading…

Q: The law of comparative advantages in trade typically applies only to trade between nations and…

A: The law of comparative advantage states that in a situation of free trade, an individual or a…

Q: which of the four options best represents specialization and its relationship with trade? absolute…

A: From the four options comparative advantage is the best representative of specialization and it…

Q: For a producer to have a comparative  advantage in a good is it necessary to be the most efficient…

A: Comparative Advantage: In the trade theory the country which has comparative a advantage in…

Q: If Argentina has an absolute advantage in the production of wheat and Chile has an absolute…

A: Introduction The theory of absolute advantage has given by Adam smith. According to Adam smith, If a…

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: which of the following statements are true? I) Two countries can achieve gains from trade even if…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Suppose an economist develops an international trade model based on the assumption that there are…

A: The Economist mostly considered only two countries and two goods for the better understanding of the…

Q: Trade can happen at pre trade prices. True/False. Explain your answer theoretically and graphically.…

A: International trade refers to the exchange of products, services, and capital across worldwide…

Q: Which situation describes when mutually beneficial trade occurs? Question options:…

A: Mutually beneficial trade, in the international market, refers to a scenario in which both trading…

Q: Gains from trade come from A) Shifting tasks to people with low opportunity costs B) Technological…

A: Gains from trade means refers to the fact that nation's imports commodities that they cannot produce…

Q: The law of comparative advantage in trade typically applies only to trade between nations and favors…

A: Comparative advantage is when one party can produce goods with lower opportunity cost. Now this…

Q: Suppose a country is currently producing at a point on its production possibility frontier, and…

A: Production possibility curve -This is a curve which shows various combination of two goods a country…

Q: A person or nation that has a comparative advantage in the production of a good, should A)…

A: Comparative Advantage means a country has some advantage in cost of production as compared to the…

Q: The United States and Canada have the production possibilities curves shown above.  It is determined…

A: The formula is:The opportunity cost of production of a good = maximum production of other good /…

Q: Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in…

A: Each country will specialize in the production where it has comparative advantage. In that way…

Q: Question 27 .  If Maxine and Daisy both specialized in the product in which they have a comparative…

A: Given : Maxine & Daisy are bakers who bake tarts and pies. They have similar level of resources…

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: The main advantage of trade between two countries is that       A) trade makes both countries more…

A: International trade is the exchange of goods and services across international boundaries. The trade…

Q: A producer has a comparative advantage in a good if it is the most efficient producer of this good.…

A: It can be defined as a situation in which a particular individual or a producer is able to produce a…

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.