Which of the following statements is correct? Two countries cannot gain from specialization and trade if they have identical opportunity costs in the production of some goods If two countries are gaining from specialization and trade, the countries must be specializing in the good they have an absolute advantage in If a certain trade is good for one country, it must be bad for the other country Two countries cannot gain from specialization and trade if one country does not have an absolute advantage in either good

Q: Determine the opportunity cost for each nation. Determine what each nation has a comparative…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Indicate True (T) or False (F) for the following questions, and explain your answer in 50 words…

A: Absolute Advantage: The absolute advantage arises when the country produces more with the given…

Q: Review Porter’s Theory of Competitive Advantage and assess the extent to which the model can be used…

A: Competitive advantage is based on some important factors which make the company or nation unique and…

Q: Which of the following BEST describes an absolute advantage for an output problem? we can make more…

A: Absolute advantage theory- A nation is said to have an absolute advantage if it requires fewer…

Q: Suppose that two countries can both produce cars and cotton. The opportunity cost of a car in…

A: Comparative cost advantage: - it is a principle of international trade given by David Ricardo which…

Q: Trade between nations can be mutually beneficial if one country has  a monopoly. an absolute…

A: When two countries are involved in an international trade there are always gains from trade.

Q: Consider two countries, China and South Africa, both producing textiles and beer. The table below…

A: From the given table we can observe that if all resources are fully employed then China can produce…

Q: When two countries are specialising and trading with each other, the gains from trade will tend to…

A: In the international market, specialization in the production of specfic good or services is implied…

Q: Which of the following best characterizes the relationship between the parties to a trade and the…

A: Answer -  Before going into the realtionship we wil  first define the gains of trade and parties of…

Q: Which of the assumptions of comparative advantage seem unrealistic? Fixed technology and imperfect…

A: Trade is defined as the exchange of commodities and services across the boundary of the country.

Q: Which of the following statements is not correct?   Trade allows for specialization.…

A: For trade to be occur minimum two parties are required.

Q: which of the four options best represents specialization and its relationship with trade? absolute…

A: From the four options comparative advantage is the best representative of specialization and it…

Q: States can produce a maximum of 600 bushels of barley or a maximum of 600 bushels of corn. Mexico…

A: The United States In USA the Barley opportunity cost are as follows 600 bushels of barley = 600…

Q: Use the theory of comparative advantage to explain how international trade between two countries…

A: International trade takes place when countries across the globe engage with each other and exchange…

Q: While different natural resources and the theory of comparative advantage can explain many trade…

A: International trade refers to the exchange of goods and services between countries across the world.…

Q: Ecuador and Argentina both produce shrimp and wheat. Ecuador can produce 50 thousand pounds of…

A: The table shows production of shrimp and wheat by Ecuador and Argentina:

Q: The Theory of Comparative Advantage states that countries gain from trade, this is because : The…

A: There are two important categories of business cycles which are inflation and recession that occur.…

Q: Which of the following is true about trade? The basis for trade is absolute advantage Trade results…

A: International trade refers to the exchange of capital, products, and services across international…

Q: According to the principle of comparative advantage, - countries should specialize in the…

A: According to the law of comparative advantage, In the 2x2 model, even if one nation is less…

Q: Question 18 Which of the following statements is correct? The gains from specialization and trade…

A: Option D is correct.  Option A is incorrect as gains from trade is based on comparative advantage…

Q: Microeconomics is the study of:     The gains from trade since we can only consume what we produce…

A: Micro economics facilitates easy understanding of our economic system.

Q: Countries have different endowments of factors of production which leads to the law of comparative…

A: Factors of production: - The inputs that are used to produce goods and services are known as the…

Q: In a two-good, two country world, if one country has a comparative advantage in the production of…

A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity…

Q: The gains from trade are evident in economic models, but seldom observed in the real world.…

A: The gains from trade are Based on the principle of absolute advantage Absolute advantage allows…

Q: Explain the following in detail with suitable examples. Absolute Advantage Comparative Advantage…

A: Absolute Advantage In financial aspects, the rule of absolute advantage alludes to the capacity of…

Q: Evaluate the following statement: "Trade is like football: one team wins and the other team loses."…

A: Evaluate the following statement: "Trade is like football: one team wins and the other team loses.…

Q: 9. Gains from trade Aa Aa Consider two neighboring island countries called Euphoria and Arcadia.…

A: The opportunity cost of Euphoria (E) to produce 1 bushels of rye can be calculated as follows.

Q: From the trade model, given the countries are at least a bit different from each…

A: A Ricardian trade model demonstrates how trade takes place between two countries and two products…

Q: An examination of the Ricardian model of comparative advantage yields the clear result that trade is…

A: The Ricardian model demonstrates that a developed country's industry can compete with a…

Q: ake two countries of two goods and set up your own numbers such that labor has absolute advantage in…

A: Let a hypothetical example in which India and China are producing wheat and LED bulbs.  Let us…

Q: A worker in the United States and a worker in China can each produce 1,000 pairs of jeans per week.…

A: Specialization in trade is based on comparative advantage in production. In international trade…

Q: Consider the following model of trade between Home and Foreign. Assume throughout that those two…

A: PR×QR=23M...............(1)PC×Qc=13M................(2)

Q: Suppose a capital abundant country, such as Canada, enters into free trade with a natural resource…

A: An economic entity is said to possess a comparative advantage in the production of a good or service…

Q: When the two countries did not specialize, the total production of jeans was 17 million pairs per…

A: Given:   Jeans Rye Dolorium 4 16 Arcadia 5 10 Note: Data for production of jeans and rye…

Q: Assume that there are two countries, Country A, which earns $5,000 per capita GDP, and Country B,…

A: Comparative advantage: A country is said to be experiencing comparative advantage over another…

Q: Consider the following model of trade between Home and Foreign. Assume throughout that those two…

A: When two countries involve in trade one country exports that good in which it has ‘comparative…

Q: In a Mixed Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific…

A: Option __B (Owners of A will benefit)__ is the correct answer.

Q: According to the Absolute and Comparative Advantage, which option is correct? the country with…

A: The ability of a nation to create goods and services at a lower opportunity cost rate than other…

Q: Consider the following model of trade between Home and Foreign. Assume throughout that those two…

A: The principle of absolute advantage states the ability of a party for production of a service or…

Q: Consider the following model of trade between Home and Foreign. Assume throughout that those two…

A: Under autarky, a country does not indulge in trade and has to be self-sufficient. The Home country…

Q: Comparative Advantage The theory of Comparative Advantage emphasizes gains that countries can…

A: Since the globalisation has been set up, all the countries are focusing on the ways to step into the…

Q: The gains from specialization and trade are discussed in terms of production gains and consumption…

A: Specialization allows countries to focus resources on producing goods and services which they are…

Q: According to the concept of comparative advantage, a good should be produced in that nation where:…

A: When a participant could generate anything at a cheaper price than someone else individual has a…