BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

Solutions

Chapter
Section
BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Are the following statements true or false? Explain in each case.

a. “Two countries can achieve gains from trade even if one of the countries has an absolute advantage in the production of all goods.”

b. “Certain talented people have a comparative advantage in everything they do.”

c. “1f a certain trade is good for one person, it can’t be good for the other one.”

d. “If a certain trade is good for one person, it is always good for the other one.”

e. “If trade is good for a country, it must be good for everyone in the country.”

To find additional study resources, visit cengagebrain.com, and search for “Mankiw.”

To determine
Classifying the statements as true or false.

Explanation

Option (a):

The statement is true. Two countries can achieve gains from trade, even if one of the countries has an absolute advantage in the production of all goods. The only condition necessary for the statement is that each country should have a comparative advantage in some good.

Option (b):

The statement is false. It is not true that one can have a comparative advantage in everything. Comparative advantage is a relative concept, and hence reflects the opportunity cost of one good or activity in terms of another. So, if one has a comparative advantage in one thing, he or she must have a comparative disadvantage in the other thing.

Optionb (c):

The statement is false. Trades are typically mutually beneficial, especially if they are based on comparative advantage...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

(Cooperatives) How do cooperatives differ from typical businesses?

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Why is productivity important?

Principles of Economics (MindTap Course List)

What distinguishes money from other assets in the economy?

Principles of Macroeconomics (MindTap Course List)

JOURNALIZING CASH RECEIPTS Enter the following transactions in a general journal:

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Define depreciation as it relates to a van you bought for your business.

College Accounting (Book Only): A Career Approach

Briefly explain what is meant by the term efficiency continuum.

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)