country has comparative advantage, if any, in which commodity, and indicate if trade is possible or beneficial. Case A: US has absolute and comparative advantage in wheat, UK in cloth. Opportunity cost of wheat in US is 1/4=0.25 cloth, in UK is 2/1=2 cloth. Similarly opportunity cost of cloth in US is 4/1=4 wheat, in UK is ½=0.5 cloth. Yes trade is beneficial. Case B: US has comparative advantage in wheat, UK in cloth, yes trade is beneficial. Case C: US has comparative in wheat, UK
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with the topic? Comparative Advantage: Countries should specialize where they have their greatest absolute advantage (if they have absolute advantage in both goods) or in their least absolute disadvantage (if they have absolute advantage in neither good). We have two countries; Syria and Australia. Syria can produce 10 barrels of Oil a day while Australia can only produce 5. Australia can produce 10 tonnes of Iron while Syria can only produce 5. Who has the comparative advantage? In determining
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it and if it sets them apart from the competition. A comparative advantage is the driving force of production for every country. In this paper we will discuss comparative advantage, abundant factors in the production of certain products, recommendations for the country to specialize in, and industries the country of my choice protects (if any). For the purpose of this paper I have chosen to explore the Netherlands and their comparative advantage. I chose this country for personal reasons as my father
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Global trade involves the export and import of goods and services between countries. Goods and services that enter into a country for sale are called imports and goods and services that goes out of a country is call export. Some countries have an advantage and disadvantage on their goods and services. The exchange rates can effects the value of imports and exports. Comparing China and Russia, China has lower labor cost and they have more people in their country. But 58% of Russia exports is oil and
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Concepts Principles of Macro-Economics Shacara Wyatt South University Online Absolute and Comparative Advantage An absolute advantage is the ability to produce a good or service while using minimum resources than any other producers (Hall & Liberman, 2014). The benefits of the international trade from absolute advantage is the fact that each country has an advantage in various goods and services. This advantage also has benefits for international trade, individuals have the opportunity to
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Question 1 (Essay Worth 15 points) Exchange Rates | Year | U.S. Dollar | South Korean Won | Malaysian Ringgits | Indonesian Rupiahs | 2008 | 1 | 9,046 | 3.49 | 9,022 | 2009 | 1 | 9,046 | 3.78 | 9,087 | 2010 | 1 | 8,995 | 3.65 | 9,144 | a. Given the change in the value of the dollar between 2008 and 2009, as indicated in the table above, describe the effects this will have on United States tourism in each of these countries. b. Explain what impact the change in the value
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produce 10 units of good A or 5 units of good B and India can produce 9 units of good A or 3 units of good B, then China has a. | a comparative advantage in both goods. | b. | a comparative advantage in good B. | c. | a absolute advantage in good A but not in good B. | d. | a comparative advantage in good A. | e. | a comparative advantage in neither good. | Don Answer is B. Reducing the ratios to China 2A:1B and India 3A:1B shows that it is more costly for India
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The End of AT&T’s Absolute Advantage in iPhone Sales The iPhone is the most sought-after smartphone on the market today. Since 2007, the iPhone is currently available only through AT&T. For years, there have been rumors that other wireless providers, such as Sprint, T-Mobile or Verizon Wireless would get the iPhone. In October, the Wall Street Journal reported that Apple is in the process of producing an iPhone that will be available to Verizon Wireless customers beginning in 2011. With
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Globalization and Economic Interdependence: 1. What does globalization mean? Globalization is the acceleration and extension of the interdependence of economic and business activities across national boundaries, in other words a development on one side of the globe will have consequences on another. As a consumer, it means more choices, generally lower prices, and increasingly blurred national identity for products and services. How do the statistics of world trade and direct investment show the
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Assignment I GOUTAM MUKHERJEE Ist Semester International Business Evolution of Trade Theories over the years Trade among counties is happening for ages. At the very basics, trade is about buying and selling – something human beings have been doing since they started living in societies. However, the same used to happen without any rules and regulations and completely depending on the individual or a group of traders. Over period of time countries have realized the need
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