Q: Difference of Heckscher Ohlin Theorem from Comparative advantage theory?
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- Explain the concept of comparative advantage and how it leads to gains from international trade.In a two-product, comparative advantage model with country A having comparative advantage in wheat and country B in computers, according to the Stolper-Samuelson theorem, owners of land in country A would lose, while owners ofcapital in would win. True FalseDiscuss the theory of comparative advantage , highlighting the extent to which the Asian Tigers have benefited from exploiting national advantages and specialization of their countries in a bid to attain a high export drive.
- Suppose a capital abundant country, such as Canada, enters into free trade with a natural resource rich country, such as India.I. Explain the form of trade, such as, who exports what and imports what, using the concept of comparative advantage in trade theory. Identify each country’s comparative advantage and disadvantage.II. Explain how trade creates winners and losers within each country?Note: You may/may not draw relevant diagrams to answer the above questions.Assume that there are two countries, Country A, which earns $5,000 per capita GDP, and Country B, which earns $50,000 per capita GDP. Using Country A and Country B and two products that you choose, thoroughly and clearly explain an example of how these countries can gain from trade pursuant to the doctrine of Comparative Advantage.When a nation concentrates on a certain production activity based on a specific resource, which of the following terms best describes the situation? an advantage of labor a comparative advantage specialization
- 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.Finally, Canada and Australia are both English-speaking countries with not-too dissimilar population sizes. However, Canada’s trade is twice as large as that of Australia’s. to what extent, does comparative advantage help explain this?When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Candonia and Sylvania. Both countries Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure. produce lemons and coffee, each initially (i.e., before specialization and trade) producing 18 million pounds of lemons and 9 million pounds of coffee, as indicated by the grey stars marked with the letter A. Candonia has a comparative advantage in the production of lemons, while Sylvania has a comparative advantage in the production of coffee. Suppose that Candonia and Sylvania specialize in the production of the goods in which each has a comparative…
- Happyland can produce 40 tones of marshmallows or 20 tones of chocolate in a year. Friendshipland can produce 80 tones of marshmallows or 40 tones of chocolate in a year. Can these countries benefit from trade with each other based on specialization and comparative advantage? Yes NoWhich one of the below describes a situation where one country's production cost are lower than the rest of other countries? a) absolute advantage, b) fair advantage, c) comparative advantage, d) relative advantageAbsolute advantage only helps one country? True or False
