Find out absolute advantage, absolute disadvantage, and comparative advantage, also the gains of trade for both countries. Case A Pakistan sri lanka rice (Kgs) 6 2 corn (Kgs) 3 5 Case B pakistan sri lanka rice (Kgs) 8 4 corn ( Kgs) 6 3

Find out absolute advantage, absolute disadvantage, and comparative advantage, also the gains of trade for both countries. Case A Pakistan sri lanka rice (Kgs) 6 2 corn (Kgs) 3 5 Case B pakistan sri lanka rice (Kgs) 8 4 corn ( Kgs) 6 3

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 5SCQ: At one point Canadas GDP was 1,800 billion and its exports were 542 billion. What was Canadas export...

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Question

Find out absolute advantage, absolute disadvantage, and comparative advantage, also the gains of trade for both countries.

Case A

	Pakistan	sri lanka
rice (Kgs)	6	2
corn (Kgs)	3	5

Case B

	pakistan	sri lanka
rice (Kgs)	8	4
corn ( Kgs)	6	3

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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