Question: A Country Will Always Be An Exporter Of A Good Where It Has A Comparative Advantage In Production.?

Can a country have comparative advantage in both goods?

In international trade, no country can have a comparative advantage in the production of all goods or services. While a country cannot have a comparative advantage in all goods and services, it can have an absolute advantage in producing all goods.

When a country has a comparative advantage in the production of a good it means that it can produce?

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.

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Do you export when you have a comparative advantage?

Comparative advantage suggests that countries will engage in trade with one another, exporting the goods that they have a relative advantage in. Absolute advantage refers to the uncontested superiority of a country to produce a particular good better.

What gives a country comparative advantage?

Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. Comparative advantage suggests that countries will engage in trade with one another, exporting the goods that they have a relative advantage in.

What does China have a comparative advantage in?

The model predicts that China has a comparative advantage in heavy goods in nearby markets, and lighter goods in more distant markets. This theory motivates a simple empirical prediction: within a product, China’s export unit values should be increasing in distance.

What is an example of comparative advantage?

Comparative advantage is what you do best while also giving up the least. For example, if you’re a great plumber and a great babysitter, your comparative advantage is plumbing. That’s because you’ll make more money as a plumber.

Who has the comparative advantage in the production of corn?

Since Saudi Arabia gives up the least to produce a barrel of oil, (¼ < 2 in Table 19.4) it has a comparative advantage in oil production. The United States gives up the least to produce a bushel of corn, so it has a comparative advantage in corn production.

Which is the best example of a country that is dependent on other countries?

The best example of a country that is dependent on other countries is a country that has very little or less fertile soil to make its resources.

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When a country has a comparative advantage in the production of a good quizlet?

A country has comparative advantage in the production of a good if it can produce that good at a lower opportunity cost relative to another country. the difference between the opportunity cost of producing the product domestically versus the cost of purchasing the product from another country receives from trade.

What type of economy do most modern nations have?

Most developed countries have mixed economic systems. Such a system has characteristics of both command and market economies.

Will a country do better importing or exporting a good for which it has a comparative advantage?

Will a country do better importing or exporting a good for which it has a comparative advantage? A country will do better exporting a good for which it has a comparative advantage. Traders will compete with one another, giving countries greater and greater amounts of the gains from trade to gain their business.

Which company has the comparative advantage in producing large tubes of toothpaste?

The correct answer is ” Mmmint “. Explanation: The Mmmint company is the one which had a comparative advantage in producing large tubes of toothpaste. According to this table, the ones that have the advantage are Fresh and “Mmmint”.

What are the four main sources of comparative advantage?

Comparative advantage is determined by a country’s resources, that is the land, labour, capital and enterprise.

Which situation is an example of comparative advantage in an international market?

Farmland in Country A can produce 100 units of rice per acre, while Country B can only produce 70 units of rice using the same amount of workers and farmland. – is an example of comparative advantage in an international market.

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How is comparative advantage determined?

In order to determine if comparative advantages exist between the two countries, you have to figure out the opportunity cost of making one unit of one of the items. Their opportunity costs are lower for each of these products relative to one another, and so there is potential for beneficial trade.

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