Reasons for experiencing gains from trade even if neither county has a comparative advantage Introduction: Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Question

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Answer 1

Question

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

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.

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Answer 2

Question

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

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.

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Answer 3

Question

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

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.

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Answer 4

Question

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

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.

Answer 6

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.

Answer 7

Chapter 17, Problem 1P

To determine

Reasons for experiencing gains from trade even if neither county has a comparative advantage

Introduction:

Comparative Advantage: The ability of the nations to produce goods at a lower opportunity cost than other nations is termed as Comparative Advantage

Answer 8

Expert Solution & Answer

Explanation of Solution

Even ifneither of the countries has a comparative advantage, the trade increases the variety of goods and services available for consumers to choose from. Further, it helps to keep the domestic prices in check as the goods and services are imported from other countries are sold at the world prices. This will further lead to the more consumption and will help to boost the economic growth of the county. It also helps to keep the nations connected to the world economy. Also, it helps in the exchange of cultures and values.