Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
8th Edition
ISBN: 9781337368087
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 3, Problem 4CQQ
To determine
The
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Which goods will a nation typically import?
a. those goods in which the nation has an absolute advantage
b.those goods in which the nation has a comparative advantage
c. those goods in which other nations have an absolute advantage
d. those goods in which other nations have a comparative advantage
What is the concept of comparative advantage in international trade? A. A country's ability to produce all goods more efficiently than other countries B. A country's ability to produce a good at a lower opportunity cost than other countries C. A country's ability to produce goods using the most advanced technology D. A country's ability to produce goods at the lowest absolute cost
Each country should specialize in producing that good for which it
a. has a comparative advantage
b. has an absolute advantage
c. it has a higher opportunity cost
Chapter 3 Solutions
Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
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- Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?arrow_forwardIn Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?arrow_forwardWill a country import or export products for which it has a comparative advantage? Explain.arrow_forward
- Rice Gadget US 14 Thailand 16 3. a. Absolute advantage: Determine which country has the absolute advantage for Rice and Gadget b. Comparative advantage: Determine what products that should be produced for each countryarrow_forwardWhich goods will a nation typically import?a. those goods in which the nation has an absolute advantageb. those goods in which the nation has a comparative advantagec. those goods in which other nations have an absolute advantaged. those goods in which other nations have a comparative advantagearrow_forwardRefer to the graph for the following questions. 1. Which country has the absolute advantage in production of Good A? A. Country Y B. Neither Country has an absolute advantage of producing Good A. C. Country X 2. Which Country has the comparative advantage in production of Good A? A. Neither Country has a comparative advantage in producing Good A. B. Country X C. Country Y 3. Which Country has the com advantage in production of Good B? A. Country X B. Country Y C. Neither country has a comparative advantage in producing Good B.arrow_forward
- Write an essay related to this treatise:NAFTA (North American Free Trade Agreement): In the introduction, develop the origin of comparative advantage and its relationship with international trade, using the selected treaty as an example. In the development of the essay, present:to. A description of the treaty that includes:* the reasons for the creation of the selected treaty and the countries included in it.* the benefits and effects of export and import in the treaty.* What were the obstacles encountered in the development of the treaty.arrow_forwardAn average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes.a. Who has the absolute advantage in coffee? Explain.b. Who has the comparative advantage in cof-fee? Explain.c. If the two countries specialize and trade with each other, who will import coffee? Explain.d. Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade.arrow_forwardWhich of the following BEST describes comparative advantage? Country A can produce a product at a lower opportunity cost than Country B Country A can produce more of a product than Country B Country A has a currency worth more than the currency of country B Country A uses a smaller amount of a resource to produce than Country Barrow_forward
- Assume that the US can produce corn at a lower opportunity cost than South Korea and South Korea can produce cars at a lower opportunity cost than the US. Which of the following is not true? a. south korea should specialize production in cars b. both countries have a comparative advantage c. the us should specialize production in corn d. the us has an absolute advantage in production of corn and carsarrow_forwardWhat is the term for a situation in which a country can produce a good at a lower opportunity cost than another country? A. Absolute advantage B. Comparative advantage C. Opportunity advantage D. Trade advantagearrow_forwardWhich of the following statements best exemplifies the concept of relative advantage in international trade? A. USA can produce both wheat and textiles more efficiently than any other country. B. USA can produce wheat more efficiently than China, while China can produce textiles more efficiently than USA. c. USA can produce more wheat than China, but China can produce more textiles than USA. D. USA and China have the same level of efficiency in producing wheat and textiles.arrow_forward
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