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If a country has comparative advantage in the production of all goods should it trade?
Wiki User
∙ 15y ago
Yes, since each country can individually specialize in its comparative advantage, the total income for both countries will increase. This is even true if one country has an absolute advantage in the production of all goods.
Wiki User
∙ 15y ago
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What is Ricardo's Theory?
In a nutshell, the price of anything is based on comparative advantage. If Adam produces clocks better and cheaper than Bill, all clock production should go to Adam.
What are the three basic economic questions of production?
What should be produced?Free markets answer this question via the market mechanism (Adam Smith's "Invisible Hand"). Firms produce what consumers are willing and able to pay for.How should it be produced?One method is specialization -- production according to comparative advantage (the lower opportunity cost, not the lower resource cost).For whom is it produced?That is, how is it distributed? In free markets, only those who are willing and able to pay will receive what is produced. In centrally-planned economies, goods and services that are produced might be distributed differently, such as according to need.
The idea behind comparative advantage was that every country should be self-sufficient industrially and agriculturally?
As a true or false question the answer would be false.Source: Viotti, P., & Kauppi, M. (2009). International relations and world politics: Security, economy, identity (4th ed.). Upper Saddle River, NJ: Prentice Hall. Text ISBN: 0131844156. EdMap package ISBN: 9780558855093
On which factor does the comparative advantage theory depend?
Absolute Advantge: For example if one unit of labor in Scotland can produce 80 units of wool or 20 units of wine; while in Spain one unit of labor makes 50 units of wool or 75 units of wine, then Scotland has an absolute advantage in producing wool and Spain has an absolute advantage in producing wine. Comparative Advantage: Two men live alone in an isolated island. To survive they must undertake a few basic economic activities like water carrying, fishing, cooking and shelter construction and maintenance. The first man is young, strong, and educated and is faster, better, more productive at everything. He has an absolute advantage in all activities. The second man is old, weak, and uneducated. He has an absolute disadvantage in all economic activities. In some activities the difference between the two is great; in others it is small. Is it in the interest of either of them to work in isolation? No, specialization and exchange (trade) can benefit both of them. How should they divide the work? According to comparative, not absolute advantage: the young man must spend more time on the tasks in which he is much better and the old man must concentrate on the tasks in which he is only a little worse. Such an arrangement will increase total production and/or reduce total labour. It will make both of them richer.
How does the international business contribute to a better standard of living for many people in various countries?
International business allows many companies to expand and grow their business beyond the country they are in. This will give them more profits and allows for more products and services to be offered from companies that get products by doing business with other countries. There are many products, which improve people's way of living, that they would not have if not for companies doing international business.Practicing business ethics can contribute to the growth of your company in many ways.
What is Ricardo's Theory?
In a nutshell, the price of anything is based on comparative advantage. If Adam produces clocks better and cheaper than Bill, all clock production should go to Adam.
What are the main ideas of David Ricardo?
international trade Ricardo's theory on international trade focused on comparative costs and looked at how a country could gain from trade when it had relatively lower costs (i.e. a comparative advantage). The original example focused on the trade in wine and cloth between England and Portugal. Ricardo showed that if one country produced a good at a lower opportunity cost than another country, then it should specialise in that good. The other country would therefore specialise in the other good, and the two countries could then trade.
What is the comparative and superlative of narrow?
the comparison of "narrow" should be "narrower, narrowest".
What are the three basic economic questions of production?
What should be produced?Free markets answer this question via the market mechanism (Adam Smith's "Invisible Hand"). Firms produce what consumers are willing and able to pay for.How should it be produced?One method is specialization -- production according to comparative advantage (the lower opportunity cost, not the lower resource cost).For whom is it produced?That is, how is it distributed? In free markets, only those who are willing and able to pay will receive what is produced. In centrally-planned economies, goods and services that are produced might be distributed differently, such as according to need.
When should front struts be replaced?
If you treat your car well at 180K miles or never depending on country of production and year.
What kind of speaking should student do?
- Presentation - Speech - Comparative - ...
The idea behind comparative advantage was that every country should be self-sufficient industrially and agriculturally?
As a true or false question the answer would be false.Source: Viotti, P., & Kauppi, M. (2009). International relations and world politics: Security, economy, identity (4th ed.). Upper Saddle River, NJ: Prentice Hall. Text ISBN: 0131844156. EdMap package ISBN: 9780558855093
Which one of these words should not be used in the comparative or superlative degree?
D
On which factor does the comparative advantage theory depend?
Absolute Advantge: For example if one unit of labor in Scotland can produce 80 units of wool or 20 units of wine; while in Spain one unit of labor makes 50 units of wool or 75 units of wine, then Scotland has an absolute advantage in producing wool and Spain has an absolute advantage in producing wine. Comparative Advantage: Two men live alone in an isolated island. To survive they must undertake a few basic economic activities like water carrying, fishing, cooking and shelter construction and maintenance. The first man is young, strong, and educated and is faster, better, more productive at everything. He has an absolute advantage in all activities. The second man is old, weak, and uneducated. He has an absolute disadvantage in all economic activities. In some activities the difference between the two is great; in others it is small. Is it in the interest of either of them to work in isolation? No, specialization and exchange (trade) can benefit both of them. How should they divide the work? According to comparative, not absolute advantage: the young man must spend more time on the tasks in which he is much better and the old man must concentrate on the tasks in which he is only a little worse. Such an arrangement will increase total production and/or reduce total labour. It will make both of them richer.
Marx believed that the should completely control production?
The people should control production and distribution. Production should take place to meet human need.
Why do transportation needs?
I should say that the most important reason is division of labor. We just cant do everything to achieve a certain goal alone. Those who has a comparative advantage in such line will do better and be more effective than us, and help us to cut the cost.
What happened to Panera Bread's production facility in Mexico?
It is still there. You should note such facility is in the town of Mexico, in the US state of Missouri, not in the country of Mexico.
