Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 15, Problem 1SQ
To determine
The theory of
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According to the theory of comparative advantage, countries gain from trade because
___a. trade makes firms behave more competitively, reducing their market power.
___b. all firms can take advantage of cheap labor.
___c. output per worker in each firm increases.
___d. world output can rise when each country specializes in what it does relatively best.
___e. every country has an absolute advantage in producing something.
Each country should specialize in producing that good for which it
a. has a comparative advantage
b. has an absolute advantage
c. it has a higher opportunity cost
What is the term for a situation in which a country can produce a good at a lower opportunity cost than another country? A. Absolute advantage B. Comparative advantage C. Opportunity advantage D. Trade advantage
Chapter 15 Solutions
Micro Economics For Today
Ch. 15.4 - Prob. 1GECh. 15.6 - Prob. 1GECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQP
Ch. 15 - Prob. 9SQPCh. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
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Similar questions
- Why don't countries specialize in the production of just a few goods for which they have a comparative advantage? a. In most cases, increasing opportunity costs would accompany the continually increasing production of a product specialist. b. In most cases, resource drains would accompany the continually increasing production of a product specialist. c. Doing so would limit innovation in other industries. d. Doing so would limit innovation in the core industries, because there would be little incentive for it.arrow_forwardplease answer the all questions A- What is the difference between Absolute and Comparative Advantage. B- Describe the methods of entering the international Business World. C- Describe the types of Trade restrictions. D-What is the International Monetary Fund.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_forward
- If country ABC can produce a unit of good 1 by sacrificing fewer units of good 2 than can country XYZ, it is correct to say that country ABC A. has a comparative advantage in producing good 1. B. has an absolute advantage in producing good 1. C. will not wish to trade good 1 with country XYZ. D. will import good 1.arrow_forwardWhat theory attempts to explain why Japan is strong in automobiles, Switzerland in precision instruments and pharmaceuticals, and Germany in chemicals? Select one: a. Absolute advantage b. New trade theory c. National competitive advantage d. Comparative advantagearrow_forwardIf France is said to have an absolute advantage over Mexico in the production of wheat, this means that, given the same resources, Mexico must have an absolute advantage in producing some good other than wheat. a. France can produce more wheat than Mexico. b. France has an absolute advantage in all goods that are complements to wheat. c. France must have an absolute advantage over Mexico in producing all goods. d. Mexico must have a comparative advantage over France in the production of wheat.arrow_forward
- An inefficient manufacturing base is likely to result when: A. only those goods are produced in which the domestic economy has a comparative advantage. B. a newly developing economy has no international trade controls C. competitive foreign imports are restricted. D. the economy produces only those goods in which it has technical expertise E. producers compete solely on the basis of low cost.arrow_forwardWhich country has the comparative advantage in production of Good B? Group of answer choices Neither country has a comparative advantage in producing Good B Country Y Country Xarrow_forwardWhich country has absolute advantage in the production of food. Explain. See attached.arrow_forward
- A country should specialize in producing the goods for which a. it has the highest opportunity cost. b. it has an absolute advantage. c. it can produce a larger quantity than any other country. d. it has a comparative advantagearrow_forwardIf a nation does not have an absolute advantage in producing anything, it a. will try to get along without trade. b. will have a comparative advantage in the activity in which it is least inefficient. c. has no comparative advantage either. d. will export raw materials and import finished products.arrow_forwardWhen a country has a comparative advantage in producing a certain good, A: the country should import that good. B: the country should produce just enough of that good for its own consumption. C:the country’s opportunity cost of that good is high relative to other countries’ opportunity costs of that same good. D: then specializing in the production of that good and trading for other goods could allow that country to consume at a point beyond its production possibilities frontierarrow_forward
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