Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 33, Problem 3QP
To determine
The effects of desire for profit on
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Think about your own interests, skills, and opportunities. In what areas do you potentially have a comparative advantage over your peers or co-workers? Are there goods or services you could provide to others more efficiently? How could you maximize your advantages to achieve positive gains from trade in your daily exchanges and relationships?
In the past, comparative advantages have sometimes shifted from one nation to another. What factors do you think caused these shifts? Why? Was there anything a nation could have done to prevent an advantage from shifting to another nation?
Will a country import or export products for which it has a comparative advantage? Explain.
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- Someone has a comparative advantage in producing a good if they can produce that good in greater quantities at a lower opportunity cost using more capital and less labor using more labor and less capitalarrow_forwardDefine comparative advantage with the use of opportunity cost. Give a real life example of it.arrow_forwardDifferentiate between the following terms. Absolute advantage and comparative advantage.arrow_forward
- When countries specialize based on their comparative advantage and trade with each other, how does it lead to gains from trade for both countries (even if one country has an absolute advantage in both goods)?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_forwardDiscuss the opportunity cost you incur for some activity in your life. Additionally, what activity do you feel you have comparative advantage in?arrow_forward
- A friend tells you the following: “Free trade sounds good, but a country like Honduras doesn’t have any comparative advantage compared to the United States. Therefore, trade with us will exploit them and make their economic situation worse.” Explain to your friend the error in his thinking.arrow_forwardDuring the last 20 to 30 years, there have been a number of countries whose economies have experienced important economic expansion and development. One group of countries has been labeled the BRIC countries and the other the VISTA countries. Identify each of the nine countries and provide some insights about their economies and economic importance. The theories of absolute and comparative advantage have been offered as an economic rationale for trade between and among regions and countries. Compare and contrast the two concepts. Which of the two do you think is more important for explaining the growth in global trade during the last 25 years? Why”arrow_forwardA) Which producer has the comparative advantage in producing puzzles? Geppetto or Lewis B) Which producer has the comparative advantage in producing puppets? C) If both producers decided to trade with each other to stock their toy stores, which of the following is a range of terms of trade that would benefit both Geppetto and Lewis (1 puppet = x puzzles)? Please explain to me how to solve those questions. Don't just give me the answers. Thank you so much!arrow_forward
- Which of the following best represents the benefit of trade based on comparative advantage? Large countries will benefit, but small countries will be better off without trade. Countries with better technology cannot benefit by trading with countries that have less technology. Small countries will benefit at a cost to larger countries. Each country can buy a good at a cost that is less than what is would cost to produce the good in the home country.arrow_forwardits already answered in this site so you can just just send me by copying it A) With the following data decide which country has comparative advantage for which good. Show your math. Good X Good Y Country A 75 75 Country B 60 70 B) Using the data above prove both countries can be better off trading with each other than if they do not trade. C)Why do we use comparative advantage to decide which country produces which good? Support your answer.arrow_forwardExplain the difference between absolute and comparative advantage in relation to trade and give an example of each. How does the type of advantage influence trade between different countries? Why is trade beneficial? What happens if a government imposes tariffs on imported products?arrow_forward
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