(a)
The
Concept Introduction:
(b)
The country that has an absolute advantage in producing wheat and in producing cloth.
Concept Introduction:
Absolute Advantage: The ability of a country to do any economic activity more efficiently than others
Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost
(c)
The country that has a comparative advantage in producing wheat and in producing cloth.
Concept Introduction:
Absolute Advantage: The ability of a country to do any economic activity more efficiently than others
Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost
(d)
The country that should specialize in producing wheat and in producing cloth.
Concept Introduction:
Absolute Advantage: The ability of a country to do any economic activity more efficiently than others
Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost
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Chapter 2 Solutions
Econ Macro (book Only)
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- 5 Difference between firm and industriesarrow_forward5- Please solve this question. Thanksarrow_forwardSuppose a country has an overall balance of trade so that exports of goods and services equal imports of goods and services. Does that imply that the country has balanced trade with each of its trading partners?arrow_forward
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