Principles Of Economics, Student Value Edition
12th Edition
ISBN: 9780134079288
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: Prentice Hall
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Chapter 33, Problem 4.4P
To determine
One side change and benefit.
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Consider two countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed.
Textiles Beer
China 5 10
South Africa 1 6
Q1 Which of the following statements are correct
There is no opportunity for mutually beneficial trade between the two (2) countries.
China has a comparative advantage in the production of textiles and beer.
South Africa has a comparative advantage in the production of beer.
The countries will not trade with each other as China can produce more of both goods without trading with South Africa
Comment on the following statement: “An examination of the Ricardian model of comparative advantage yields the clear result that trade is (potentially)beneficial for each of the two trading partners since it allows for an expanded consumption choice for each. However, for the world as a whole, the expansion of production of one product must involve a decrease in the availability of the other, so that it is not clear that trade is better for the world as a whole as compared to an initial situation of non-trade (but efficient production in each country). ”
The more dissimilar two cultures are, the greater the degree of influence culture has on intercultural communication. How strongly intercultural communication has affected the business world
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Principles Of Economics, Student Value Edition
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