1. Distinguish between absolute advantage and comparative
advantage within the context of the Ricardian model of trade
2. briefly explain how the theory of comparative advantage
relates to the need for international business.
Explain this difference between absolute advantage and
comparative advantage. If a country has an absolute advantage in
everything, can it still benefit from trade? Why or why not?
we looked at the notion of both absolute advantage and
comparative advantage by examining a hypothetical economy producing
wine and cloth. Let us continue to develop our understanding of
these important concepts through some more numerical examples.
Note: The questions in this section , they build on each other in
order.
Imagine a hypothetical economy with two workers - Worker A and
Worker B. Assume that Worker A can produce either 10 bottles of
wine or 5 yards of cloth...
1. distinguish between absolute advantage and comparative
advantage .
2.Define free Rider
3. Externality curve shift-New power lines and impact on
existing home market
4.production possibility curve with break through in technology
and recession.
=2000 mars max
=1500 skittles max
=currently 700 mars and 800 skittles
=what is the opportunity cost of 200 more mars bars
=breakthrough in caramel production allows them to produce 2500
mars max
= recession hits , depict what will happen in mars and skittle
markets...
Explain the difference between absolute advantage and
comparative advantage. Which is the basis for international trade,
and why? (Please Type Answer, No Handwriting)
The primary difference between absolute and comparative
advantage is
Group of answer choices
a.Absolute advantage refers to the ability to produce more of a
good or service using the same amount of resources and comparative
advantage refers to the ability to produce a good or service at a
lower opportunity cost
b.Absolute advantage doesn't change as time passes, while
comparative advantage does
c.Absolute advantage is a concept that was utilized in communist
countries and comparative advantage is a capitalist idea...
Discuss the difference between absolute advantage and
comparative advantage. Which is more important in determining trade
patterns? Justify your answer.