Under what conditions is the production possi￾bilities frontier linear rather than bowed out? 2. Explain how absolute advantage and compara￾tive advantage differ. 3. Give an example in which one person has an absolute advantage in doing something but another person has a comparative advantage.

Foundations of Business (MindTap Course List)
6th Edition
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Chapter3: Global Business
Section3.5B: International Economic Organizations Working To Foster Trade
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Under what conditions is the production possi￾bilities frontier linear rather than bowed out? 2. Explain how absolute advantage and compara￾tive advantage differ. 3. Give an example in which one person has an absolute advantage in doing something but another person has a comparative advantage. 4. Is absolute advantage or comparative advan￾tage more important for trade? Explain your reasoning using the example in your answer to Question 3. 5. If two parties trade based on comparative advantage and both gain, in what range must the price of the trade lie? 6. Will a nation tend to export or import goods for which it has a comparative advantage? Explain. 7. Why do economists oppose policies that restrict trade among nations?
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