Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 21, Problem 3QP
To determine
The effects of desire for profit on
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The desire for profit can end up pushing countries toward producing goods in which they have a comparative advantage. Do you agree or disagree?
In the past, comparative advantages have sometimes shifted from one nation to another. What factors do you think caused these shifts? Why? Was there anything a nation could have done to prevent an advantage from shifting to another nation?
Which country has a comparative advantage in the production of wine?
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- True or False. Both Countries would be better off if they produced the good in which they have a comparative advantage and then traded 300 million tons of grain for 200 million cars.arrow_forwardThink about your own interests, skills, and opportunities. In what areas do you potentially have a comparative advantage over your peers or co-workers? Are there goods or services you could provide to others more efficiently? How could you maximize your advantages to achieve positive gains from trade in your daily exchanges and relationships?arrow_forwardI don't understand the second part of this homework. If Frankie and Johnny completely specialize according to comparative advantage, what will happen to the amount of eggs and milk? I have the opportunity cost calculated to understand who should do what in this case. But what will I do to that number?arrow_forward
- Someone has a comparative advantage in producing a good if they can produce that good in greater quantities at a lower opportunity cost using more capital and less labor using more labor and less capitalarrow_forwardWhat is opportunity cost of a T-shirt in Mexico? Show all your calculations. What is opportunity cost of a T-shirt in Egypt? Show all your calculations. Which country has comparative advantage in production of T-shirts? How do you know? Explain your answer.arrow_forwardWill a country import or export products for which it has a comparative advantage? Explain.arrow_forward
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