The purchase and sale of goods between Country A and other countries.

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Answer 1

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.

Economics Concept Introduction

Comparative advantage: Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than other countries.

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PART II: Multipart Problems wood or solem of triflussd aidi 1. Assume that a society has a polluting industry comprising two firms, where the industry-level marginal abatement cost curve is given by: MAC = 24 - ()E and the marginal damage function is given by: MDF = 2E. What is the efficient level of emissions? b. What constant per-unit emissions tax could achieve the efficient emissions level? points) c. What is the net benefit to society of moving from the unregulated emissions level to the efficient level? In response to industry complaints about the costs of the tax, a cap-and-trade program is proposed. The marginal abatement cost curves for the two firms are given by: MAC=24-E and MAC2 = 24-2E2. d. How could a cap-and-trade program that achieves the same level of emissions as the tax be designed to reduce the costs of regulation to the two firms?

Answer 2

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.

Economics Concept Introduction

Comparative advantage: Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than other countries.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.

Economics Concept Introduction

Comparative advantage: Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than other countries.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.

Economics Concept Introduction

Comparative advantage: Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than other countries.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.

Economics Concept Introduction

Comparative advantage: Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than other countries.

Answer 6

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.

Economics Concept Introduction

Comparative advantage: Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than other countries.

Answer 7

Chapter 16, Problem 1CQ

To determine

The purchase and sale of goods between Country A and other countries.

Answer 8

Expert Solution & Answer

Explanation of Solution

Every economy has their own natural resources, which are being used for the production of goods and services for the society. The productivity of each factor would be different in different economies. Thus, the economies should identify whether they have absolute advantage or comparative advantage in the production of a commodity. Absolute advantage is the ability of a country to produce a commodity or service using the same or fewer resources than the other countries. Comparative advantage is the advantage to produce a commodity at a lower opportunity cost than the other countries.

Thus, according to the advantage theory of nations, it suggests that every economy should focus their production on goods and services for which they have comparative advantage than the others. This process is known as specialization. An economy can produce more because of this and the excess after domestic need can be exported to other economies in exchange for the commodities for which the economy does not have comparative advantage. This is the reason why Country A’s households and businesses buy things from foreigners. Country A’s economy imports the goods for which it does not have comparative advantage, whereas exports the items for which it has comparative advantage.

The goods for which Country A’s economy has comparative advantage is in the case of the capital goods such as automobiles, computers, semi-conductors, telecommunication equipment, and so forth. Other major exports include the civilian aircrafts, electrical equipment, and chemicals. The imports are the commodities for which Country A’s economy has comparative disadvantage of production. It includes crude oil, textiles, sporting goods, diamonds, motorcycles, and so forth.