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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Think 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?
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?
Will a country import or export products for which it has a comparative advantage? Explain.
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Differentiate between the following terms. Absolute advantage and comparative advantage.arrow_forwardWhich of the following BEST describes comparative advantage? Country A can produce a product at a lower opportunity cost than Country B Country A can produce more of a product than Country B Country A has a currency worth more than the currency of country B Country A uses a smaller amount of a resource to produce than Country Barrow_forwardA friend tells you the following: “Free trade sounds good, but a country like Honduras doesn’t have any comparative advantage compared to the United States. Therefore, trade with us will exploit them and make their economic situation worse.” Explain to your friend the error in his thinking.arrow_forward
- During the last 20 to 30 years, there have been a number of countries whose economies have experienced important economic expansion and development. One group of countries has been labeled the BRIC countries and the other the VISTA countries. Identify each of the nine countries and provide some insights about their economies and economic importance. The theories of absolute and comparative advantage have been offered as an economic rationale for trade between and among regions and countries. Compare and contrast the two concepts. Which of the two do you think is more important for explaining the growth in global trade during the last 25 years? Why”arrow_forwardWhich 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.arrow_forwardIf a country produces only two goods, then it is not possible to have a comparative advantage in the production of both those goods. True Falsearrow_forward
- Opportunity cost is an important factor in looking at comparative advantage. True Falsearrow_forwardThe table below shows the maximum quantities of two goods that each country can produce. If the countries follow the principle of comparative advantage, which of the following is a potential benefit of trade? Vibranium (tons) Gold (tons) Wakanda 8 tons 2 tons Zamunda 2 tons 1 ton Group of answer choices Trade can allow each country to increase consumption beyond its production possibilities frontier. Trade can allow each country to shift its production possibilities frontier outward to higher levels of production. Trade can allow each country to become less vulnerable to the actions of the other country. All of these answers are correct.arrow_forwardAccording to the theory of comparative advantage, countries gain from trade because Group of answer choices World output can rise when each country specializes in what its does relatively best. All firms can take advantage of cheap labor. Output per worker in each firm increases. Every country has an absolute advantage in producing something. Trade makes firms behave more competitively, reducing their market powerarrow_forward
- The two phrases/words that can be expressed in terms of each other are? opportunity costs and comparative advantage Or absolute advantage & comparative advantage In order to have gains in trade between two countries, it is not necessary for there to be (a/an)? absolute advantage True Falsearrow_forwardIs it possible to not have a comparative advantage at anything? Why or why not?arrow_forwardThe U.S. can produce 100 pounds of beef or 10 cars; in contrast Germany can produce 40 pounds of beef or 30 cars. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing cars? What is the opportunity cost of producing one pound of beef in the U.S. What is the opportunity cost of producing one pound of beef in Germany?arrow_forward
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