Under what conditions is the production possibilities frontier linear rather than bowed out? 2. Explain how absolute advantage and comparative advantage differ. 3. Give an example in which one person has an absolute advantage in doing something but another person has a comparative advantage.
Under what conditions is the production possibilities frontier linear rather than bowed out? 2. Explain how absolute advantage and comparative advantage differ. 3. Give an example in which one person has an absolute advantage in doing something but another person has a comparative advantage.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Under what conditions is the production possibilities frontier linear rather than bowed out?
2. Explain how absolute advantage and comparative advantage differ.
3. Give an example in which one person has an
absolute advantage in doing something but
another person has a comparative advantage .
4. Is absolute advantage or comparative advantage more important for trade? Explain your
reasoning using the example in your answer to
Question 3.
5. If two parties trade based on comparative
advantage and both gain, in what range must
the price of the trade lie?
6. Will a nation tend to export or import goods for
which it has a comparative advantage? Explain.
7. Why do economists oppose policies that restrict
trade among nations?
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