Which of the following are correct regarding the sources of gains from trade and absolute / comparative advantages? absolute advantage measures cost from an explicit input utilization perspective it is generally comparative, not absolute advantages, that give rise to gains from trade under specialization absolute advantages alone determine the direction of trade in goods and services comparative advantage measures cost from a foregone output perspective

Which of the following are correct regarding the sources of gains from trade and absolute / comparative advantages? absolute advantage measures cost from an explicit input utilization perspective it is generally comparative, not absolute advantages, that give rise to gains from trade under specialization absolute advantages alone determine the direction of trade in goods and services comparative advantage measures cost from a foregone output perspective

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter6: Managing In The Global Economy

Section: Chapter Questions

Problem 8E

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Historical evidence suggests that, when technology matures and industrial production moves to countries with lower costs, products which in the past were exported will start being imported.The theory that foresaw this trade reversal goes under the name of:a. Factor endowment reversalb. Theory of overlapping demandc. Theory of product life cycled. Theory of dynamic comparative advantagee. None of the above
I made a mistake when submitting, the answer options are this instead: - Denmark has a slight comparative advantage in television production because that activity is skill and capital intensive. - Denmark has a strong absolute advantage in TV production thanks to its skilled workers. -Televisions are highly differentiated and knowledge intensive products, where mainly increasing returns drives trade. - Denmark outsources important parts of its TV value chain. Firms move down their learning curves. Does the original answer still stand? Thank you
International trade Consider an H-0 economy in which there are two countries (US and France), two goods (wine and cheese) and two factors(capital and labor). Q1: Suppose an increase in the labor force in the US causes cheese production to increase. Which factor is used intensivelyin wine production? Which H-O theorem is applied to get this answer? Explain.
The intra-industry trade index in television trade for Denmark is 0.92. What conclusion can we draw from this? Group of answer choices - Denmark has a slight comparative advantage in television production because that activity is skill and capital intensive. - Denmark has a strong absolute advantage in TV production thanks to its skilled workers. Televisions are highly differentiated and knowledge intensive products, where mainly increasing returns drives trade. - Denmark outsources important parts of its TV value chain. Firms move down their learning curves.
Q69 Comparative advantage is the... a. Gains from international trade. b. Ability of one region to produce a commodity with less labour input than another region. c. Terms of trade index. d. Ability of one region to produce a commodity at a lower opportunity cost than another region. e. Ability of one region to produce a commodity with fewer total inputs than another region.
International trade Consider an H-0 economy in which there are two countries (US and France), two goods (wine and cheese) and two factors(capital and labor). Q1:Suppose a decrease in the price of cheese causes a decrease in the wage rate in the US economy. Which factor is used intensively in cheese production in France? Which HO theorem is used to get this answer? Explain.
No Plagiarism Please! • Distinguish between absolute advantage and comparative advantage. • Analyze the role of comparative advantages in the production of goods and services. • Define trade barriers such as tariffs, quotas, embargoes, standards, and subsidies. • Explain the causes, benefits, and consequences of trade barriers on consumers and producers. • Analyze multinational entities in economic and social terms. • Explain how changes in exchange rates can have an impact on the purchasing power of groups in the United States and in other countries. • Identify tools used to measure levels of development and describe the characteristic of developed nations and less developed countries. • Understand the role investment plays in development and identify the purpose of foreign aid. • Explain how current globalization trends and policies affect labor markets, resources, and income distribution in different nations. • Evaluate the arguments for and against free trade.
Consider an international economy consisting of USA and China. There are two factors: capital (K) and labor (L) and two goods: manufacture(M) and food (F): The two countries share the same constant returns to scale production functions. Representative consumers of the two countries share the same homothetic welfare functions with usual properties. At autarky (before trade) and after trade opens, both countries produce both goods. All the prices are in terms of units of food. Thus, the price of food is 1: The USA is capital abundant: Here, L and K are USA endowments of labor and capital and Land Kare Chinese endowments of labor and capital. Assume that food industry is capital intensive and manufacturing is labor intensive. All markets are competitive. (a) Define the following terms: manufacture industry is labor intensive. (b) Draw how the relative supply curves of USA and China might look like and explain their relative positions using the Rybczynski theorem. Use PM/PFon the…
Use the three-panel internal economies of scale diagram to show the overall impact of trade integration between two identical economies.
One of the assumptions of classical theory of international trade is constant returns to scale but most production activities face decreasing returns to scale. Explain the difference between these concepts using a production function.
Suppose a capital abundant country, such as Canada, enters into free trade with a natural resource rich country, such as India.I. Explain the form of trade, such as, who exports what and imports what, using the concept of comparative advantage in trade theory. Identify each country’s comparative advantage and disadvantage.II. Explain how trade creates winners and losers within each country?Note: You may/may not draw relevant diagrams to answer the above questions.
sugar, You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 3. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the countries to specialize based on comparative advantage. How would trade Improve economic efficiency? 4. Think about your own interests, skills, and opportunities. In what areas do you potentially have a comparative advantage over your peers or co-workers? Are there goods or services you could provide to others more efficiently? How could you maximize your advantages to achieve positive gains from trade…