Question: Explain the difference between absolute and comparative advantage. Why do we generally use comparative advantage when we study trade?

Explain the difference between absolute and comparative advantage. Why do we generally use comparative advantage when we study trade?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

As we have talked about gains from trade using production possibilities frontier. Based on what we have learned, explain the difference between absolute and comparative advantage. Next, explain if...

Q:

Explain the difference between absolute and comparative advantage. Next, explain if two countries should trade if there is a comparative advantage but no absolute advantage. Lastly, if Pennsylvania...

Q:

Two countries produce two different items, root beer and cheese. The table below shows the amounts of each commodity that each country can produce with 600 units of factor inputs (productive units)....

Q:

Question 5 a) In a simple 2 commodity economy, explain how opening to trade can shift the country off the production possibility frontier and onto a higher utility function. To achieve this result,...

Q:

own Browser + Webcam Page 1 of 26 Previous Page Next Page Question 1 (1 point) Ouszen age 2 What is the difference between absolute and comparative advantage in international trade? Absolute...

Q:

ch7 1.How do we know that the equilibrium in a perfectly competitive market is efficient? It becomes efficient once it meets two important conditions, which are allocative efficiency and productive...

Q:

The difference between absolute and comparative advantage is that: Group of answer choices absolute advantage refers to input cost, while comparative advantage refers to opportunity cost. absolute...

Q:

2003 APW MACROECONOMICS FREE-RESPONSE QUESTIONS (Form B) g5. 40 30 Ashna Luna 10 40 MACHINES 2. Using equal amounts of resources, the countries of Ashna and Luna can each produce any combination of...

Q:

00 24 -- HR PAIN SEC International Trade: End of Chapter Problems 1. What is the difference between absolute and comparative advantage? a. An absolute advantage exists when individual A can produce...

Q:

1. Explain the important difference between absolute and comparative advantage. 2. Explain why nations should specialize in production of the goods in which they have a comparative advantage. 3....

Q:

You are the Controller of a company that has recently been acquired by a larger organization. You and your team have been asked to provide a summary of the financial performance of your organization...

Q:

Drill oil Plc is a medium-sized company that supplies exploration and drilling equipment to companies engaged in the upstream sector of the oil and gas industry in Scotland. It has a staff strength...

Q:

Examples 11.2, 11.6, and 11.8 in Sections 11.1 and 11.2 used a sample of n 5 175 students to estimate the mean daily hours that Penn State students watch television. The following summary shows...

Q:

please what should be the anwer in question for box and solution The whirlpool factory in Oxford, Mississippi. makes built-in kitchen ovens. In the 1990s, this plant re-engineered its processes to...

Q:

1. Build trust and share information with others.

Q:

11. What types of information collected are most frequently used in decision-making?

Q:

10. How much time does it take between when we collect information until it is used in decision-making?