The meaning of comparative advantage and explain the reason why it leads to international trade. Concept Introduction: Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

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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 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

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Sue is a sole proprietor of her own sewing business. Revenues are $150,000 per year and raw material (cloth, thread) costs are $130,000 per year. Sue pays herself a salary of $60,000 per year but gave up a job with a salary of $80,000 to run the business. ○ A. Her accounting profits are $0. Her economic profits are - $60,000. ○ B. Her accounting profits are $0. Her economic profits are - $40,000. ○ C. Her accounting profits are - $40,000. Her economic profits are - $60,000. ○ D. Her accounting profits are - $60,000. Her economic profits are -$40,000.

Select a number that describes the type of firm organization indicated. Descriptions of Firm Organizations: 1. has one owner-manager who is personally responsible for all aspects of the business, including its debts 2. one type of partner takes part in managing the firm and is personally liable for the firm's actions and debts, and the other type of partner takes no part in the management of the firm and risks only the money that they have invested 3. owners are not personally responsible for anything that is done in the name of the firm 4. owned by the government but is usually under the direction of a more or less independent, state-appointed board 5. established with the explicit objective of providing goods or services but only in a manner that just covers its costs 6. has two or more joint owners, each of whom is personally responsible for all of the partnership's debts Type of Firm Organization a. limited partnership b. single proprietorship c. corporation Correct Number

The table below provides the total revenues and costs for a small landscaping company in a recent year. Total Revenues ($) 250,000 Total Costs ($) - wages and salaries 100,000 -risk-free return of 2% on owner's capital of $25,000 500 -interest on bank loan 1,000 - cost of supplies 27,000 - depreciation of capital equipment 8,000 - additional wages the owner could have earned in next best alternative 30,000 -risk premium of 4% on owner's capital of $25,000 1,000 The economic profits for this firm are ○ A. $83,000. B. $82,500. OC. $114,000. OD. $83,500. ○ E. $112,500.

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 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

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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 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

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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 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

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

Answer 5

Chapter 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

Answer 6

Chapter 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

Answer 7

Chapter 8, Problem aWYWL

To determine

To write:

The meaning of comparative advantage and explain the reason why it leads to international trade.

Concept Introduction:

Comparative Advantage is the concept of analyzing, sourcing and implementing various factors or measures which will improve or enhance the productive efficiency or capacity of goods or services and lower the expenditure or loss, to help the business entities or the nation to make it one of the frontrunners in the aforesaid area or sector when compared to other business or nation.

Answer 8

Expert Solution & Answer

Explanation of Solution

An example of comparative advantage: India’s comparative advantage over the United States is in the form of cheap labor. India’s expertise lies in providing quality IT services at cheaper costs when compared to the US. The US comparative advantage is in the specialized, capital intensive labor. Americans produce sophisticated goods or investments opportunities at lower opportunity costs.

This concept takes into consideration various factors like the geographical area, capital, labor, natural resources etc of a business or nation. This is compared it with other competing business or nation to ascertain if the goods or services produced are actually profitable or if the business or nation has to consider choosing a different product or service. It also embodies as to how the concept must be implemented to enhance the existing opportunities of the business or nation.

By following the above mentioned principles, a nation or a business can gain possible advantages internationally by increasing its strengths and thereby growing into a global powerhouse.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 8 - Prob. aWYWL Ch. 8 - Prob. bWYWL Ch. 8 - Prob. cWYWL Ch. 8 - Prob. dWYWL Ch. 8 - Prob. eWYWL Ch. 8 - Prob. 1QFT Ch. 8 - Prob. 2QFT Ch. 8 - Prob. 3QFT Ch. 8 - Prob. 4QFT Ch. 8 - Prob. 1P

Explanation of Solution

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