The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

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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 28, Problem 7P

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To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

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Answer 2

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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 28, Problem 7P

To determine

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

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Answer 3

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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 28, Problem 7P

To determine

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Expert Solution & Answer

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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 28, Problem 7P

To determine

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Expert Solution & Answer

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Answer 5

Chapter 28, Problem 7P

To determine

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Answer 6

Chapter 28, Problem 7P

To determine

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Answer 7

Chapter 28, Problem 7P

To determine

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 28 - Prob. 1P Ch. 28 - Prob. 2P Ch. 28 - Prob. 3P Ch. 28 - Prob. 4P Ch. 28 - Prob. 5P Ch. 28 - Prob. 6P Ch. 28 - Prob. 7P Ch. 28 - Prob. 8P Ch. 28 - Prob. 9P Ch. 28 - Prob. 10P

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Solution Summary: The author explains the effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times.

Concept explainers

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

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Chapter 28 Solutions

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

Solution Summary: The author explains the effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times.

Concept explainers

To explain: The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.

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Chapter 28 Solutions

To explain:

The effect on absolute and comparative advantage of two countries A and B if the productive capacity of A rises three times given country A has lowest opportunity cost of producing good X and country B has the lowest opportunity cost of producing good Y.