EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 2, Problem 5QR
To determine
Meaning of absolute advantage.
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absolute advantage in the production of all goods. is True or False
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Can more than one producer have an absolute advantage at producing the samegood? Why or why not?
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EBK PRINCIPLES OF MICROECONOMICS (SECON
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- If an economy has the absolute advantage in the production of all goods over another economy, then mutually beneficial trade is not possible between the two economies. True or Falsearrow_forwardA producer has a comparative advantage in a good if it is the lowest opportunity cost producer of this good, even if it is not the most efficient producer of this good. True Falsearrow_forwardWhat distinguishes comparative advantage from absolute advantage in production?arrow_forward
- A country has an absolute advantage in the production of a good if it can _____ of the good than another country.arrow_forwardWhich trade advantage is used more commonly among economists? absolute advantage comparative advantage neitherarrow_forwardWhat is the difference between absolute advantage and comparative advantage in decisions to trade with another country?arrow_forward
- A producer has a comparative advantage in a good if it is the most efficient producer of this good. True Falsearrow_forwardDefine comparative advantage with the use of opportunity cost. Give a real life example of it.arrow_forwardSuppose you are a CEO in a big corporation, you manage challenging operations and you have to make daily critical decisions but you can also type faster than your secretary. You have an absolute advantage in ………………. You have a comparative advantage in …………….arrow_forward
- How is the theory of absolute advantage similar to that of comparative advantage? How is it different?arrow_forwardtrue or false Economic models must mirror reality or they are of no value. When economists make normative statements, they are more likely to be acting as scientists. If a country's worker can produce 5 hamburgers per hour and 10 bags of fries per hour, then absent trade with other countries,the price for 1 bag of fries is 2 hamburgers. If trade benefits one country, it's trading partner must be worse off due to the price of trade. If an advanced country has an absolute advantage in the production of everything(relative to certain less developed countries), the advanced country will benefit if it eliminates trade with less developed countries and becomes self sufficient.arrow_forward
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