Lebron James scenario 6, who has comparative advantage in mowing the lawn?
1W is focused space board of education backpack smaller so Country B produces Cloth at the Lower Opportunity Cost PowerPoint Presentation : Now, lets look at Wine.
Product Market And withinputs(hours thesmaller numberindicatesabsolute advantage; that country ismore efficientbecause it can produce a goodabsolutelyfasterthan the otherwith the same inputs.
They should specialize in producing Wine and give up the production of Cloth.15 B PowerPoint Presentation : How is this going to work our for Country A?However, they are not sure which good, cloth or wine, they are better (or more efficient) at producing relative to the other country.Rabbit can produce absolutely more guns than Wabbit 20 units.Example follows PowerPoint Presentation : 5 Gallons of Wine To trade away 10 yards of cloth To trade away 15.70 A Assume the Terms of Trade were 1C 3W.33C (reciprocals) This means Country B could sell 10 yards of Cloth and.Why do we specialize?Read the following 2 points carefully: (1) If I produce something, I want to sell it for more than what it costs me to produce.PowerPoint Presentation : Lets assume Country A chooses to produce a balance of Cloth and Wine with their given resources.
(Djibouti/Canada) has acomparative advantage in producing wheat.
Japan has comparative advantage in computers because they only have to give up 5/3rds of a car versus the.S.For example, let's say that a worker in China can produce either 2 pounds of rice or 3 bananas in an hour.(Djibouti/Canada) has anabsolute advantage in bothcommodities.(West Group) Minn, 1995.They make the Allocative Efficiency decision to produce 10 yards of Cloth and 1 0 gallons of Wine.What country has acomparative advantage in guns?If Country A is better than Country B at producing everything, would Country A gain anything by trading with Country B?Another problem with the general application of this theory is the limitation on sources of value for a good.Download ppt "Comparative and absolute advantage.".International trade does not require offsetting absolute advantages but is possible where a comparative advantage exists.
America has an absolute advantage in technology production and answering service calls when compared to India.
That the farmer of the poor land should go raise sheep is not self-evident.