Economics (Book Only)
12th Edition
ISBN: 9781285738321
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 34, Problem 1WNG
(a)
To determine
The good in which Country C has a
(b)
To determine
The good in which Country I has a comparative advantage.
(c)
To determine
The favorable set of terms of trade.
(d)
To determine
The production and consumption of goods X and Y before and after specialization.
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Using the data in the accompanying table, answer the following questions:
a. For which good does Canada have a comparative advantage?b. For which good does Italy have a comparative advantage? c. What might be a set of favorable terms of trade for the two countries?d. Prove that both countries would be better off in the specialization-trade case than in the no-specialization-no-trade case.
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
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
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- We see quite a bit of international trade in the real world. And trade is driven by specialization. So why don’t we see full specialization—for instance, all cars in the world being made in South Korea, or all the mobile phones in the world being made in China? Choose the best answer from among the following choices. a. High tariffs. b. Extensive import quotas c. Increasing opportunity costs. d. Increasing returns.arrow_forwardA) With the following data decide which country has comparative advantage for which. Show your math. Good A Good B Country 1 300 30 Country 2 60 90 B) Using the data from above prove both countries can be better off trading with each other than if they do not C) Why do we use comparative advantage to decide which country produces which good? Support your answerarrow_forwardDetermine the opportunity cost for each nation. Determine what each nation has the comparative advantage in using the opportunity cost from the last question.arrow_forward
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