person has an absolute advantage in which activities? Someone can produce more per unit of time will always be given absolute advantage in that given activity. Michelle’s has the absolute advantage in both potatoes and chickens simply because her opportunity cost of raising chickens is four lbs. of potatoes per chicken. James’ O.C. of chickens is two pounds of potatoes per chicken. * Which person has comparative advantage in potatoes? Michelle has the comparative advantage in potatoes since
Words: 461 - Pages: 2
grain | 4/5 cars | d) Which country has an absolute advantage in producing cars? In producing grain? In producing cars both countries have absolute advantage because each worker in these countries produces 4 cars/year. But in producing grain USA has an absolute advantage because in 1 year a worker produces 10 tons of grain instead of the JAPAN worker who produces 5 tons of grain. e) Which country has a comparative advantage in producing cars? In producing grain? USA has a lower
Words: 1146 - Pages: 5
Comparative & Absolute Advantage There are many different advantages that can be gained when working in the different economic markets. There are two advantages known as a comparative advantage and an absolute advantage. Absolute advantage is known for the capability of a individual or country to produce a good or service with less assets than another country or individual. Comparative advantage is the capacity of an individual or country to manufacture a particular product for a lower opportunity
Words: 417 - Pages: 2
Abstract This paper is on the economic concepts of opportunity costs, absolute and comparative advantages as well as the purpose of trades. The paper takes a scenario and using the data, analyzes the opportunity costs each person achieves as well as who has the absolute and comparative advantages between both products of corn and pigs. Also, using research from the book and the internet, I was able to tie in these concepts to international businesses and nations alike, determine the important of
Words: 843 - Pages: 4
FINAL EXAM 1. Absolute and comparative advantage Comparative advantage is the relative opportunity cost of producing particular goods. Absolute advantage is the ability of a country to produce a specific good with fewer resources (per unit of output) that other countries. 2. Calculate unemployment rate Unemployment rate = # of unemployed people/labor force (only those actively seeking employment) 3. What happens when a bank makes a loan When a bank creates a loan
Words: 734 - Pages: 3
International Trade Simulation Student January 22, 20xx XECO/212 This is a report for the President of Rodamia to discuss the advantages and the disadvantages of international trade between Rodamia and the surrounding countries around Rodamia. This report is also going to discuss the absolute and comparative advantage. Based on the information from this report, there is going to be a possible recommendation to the President of Rodamia whether or not to trade internationally
Words: 1177 - Pages: 5
to do with goods, such as anti-dumping, agriculture, tariffs, and technical barriers. The most important thing that I have learned from this website was what the WTO is and what it does. DEFINE absolute and comparative advantage. Absolute advantage- In economics, the principle of absolute advantage is the ability of a party (an individual, or firm, or country) to produce more of a
Words: 413 - Pages: 2
Compute opportunity costs from a production possibilities frontier. Identify feasible and infeasible and efficient and inefficient points from a production possibilities frontier. Identify comparative and absolute advantage from a production possibilities frontier. Describe trade based on comparative advantage. Identify positive and normative statements. Question: Two important industries on the island of Bermuda are fishing and tourism. According to data from the World Resources Institute and
Words: 2409 - Pages: 10
beneficial to all participants if each country would specialise in the production of goods where it had an absolute advantage in terms of costs. By producing a good cheaper than everyone else and by importing others, a country could immensely gain from international trade. Although revolutionary, Smith’s theory of absolute advantages was not free from flaws. In fact if a country didn't have such advantage in producing a given good it wouldn't have access to trade, or in another words, trade wouldn't occur
Words: 1813 - Pages: 8
Contents Summery 3 Comparative Advantage theory 4 Theory of comparative advantage 4 Example situation of comparative advantage 5 Examples (Brazil, India, China -Russia) 6 Infant Industries 8 Operation of Capitalism 10 Conclusion 13 Recommendations 14 Bibliography 15 Summery The purpose of this report is to gain an understanding of different theories, ideas behind them and to show examples of how they are implemented. Report outlines the limitations to the idea that countries should
Words: 2872 - Pages: 12
