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What factors may affect the advantage of a country in producing a certain commodity?
Wiki User
∙ 12y ago
1. Availability and price of labour.
2. Human capital of labour (i.e.) training, skills, and ability).
3. Availability and price of capital (e.g.) machinery; financing).
4. Availability, type, and price of land (i.e.) natural resources).
5. Non-production factors, such as: government fiscal policy (taxation and/or subsidation); government monetary policy (price level and nominal exchange rate); transportation costs; legal constraints (e.g.) legal monopolies); barriers to entry in the current market (see: potential comparative advantage).
Wiki User
∙ 12y ago
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What is commodity dependence?
When a country relies on a certain commodity.
Why does country a have a comparative advantage over country b in the production of televisions?
Country A has a lower opportunity cost for producing televisions
According to classical trade theory a country will export an item?
in which it has a comparative advantage in producing
Example of absolute advantage?
A country has an absolute advantage over another in producing a commodity if it can produce that commodity using fewer resources than the other country. Example, country A can produce widget using one unit of labor, country B can produce one widget using two units of labor, then country A has an absolute advantage over country B in producing widgets.
When does Country A have a comparative advantage over Country B in the production of televisions?
Country A has a lower opportunity cost for producing televisions.
What is commodity dependence?
When a country relies on a certain commodity.
When might a country specialize in producing a particular good?
When a country has an absolute advantage in production of that good it may specialize in producing that good.
Why does country a have a comparative advantage over country b in the production of televisions?
Country A has a lower opportunity cost for producing televisions
According to classical trade theory a country will export an item?
in which it has a comparative advantage in producing
Example of absolute advantage?
A country has an absolute advantage over another in producing a commodity if it can produce that commodity using fewer resources than the other country. Example, country A can produce widget using one unit of labor, country B can produce one widget using two units of labor, then country A has an absolute advantage over country B in producing widgets.
When does Country A have a comparative advantage over Country B in the production of televisions?
Country A has a lower opportunity cost for producing televisions.
How do you define one commodity country?
A one commodity country is a nation that depends to varying degrees on single commodities for large percentages of their total exports.
What impact did david ricardo have on history?
David Ricardo contributed the theory of comparative advantage, arguing free trade of countries and specialization from certain individuals and groups. Ricardo was a member of British Parliament and presented his theories among his peers as a way of helping the British economy. The Ricardian theory of comparative advantage also became a basic constituent of neoclassical trade theory. Any undergraduate course in trade theory includes expansions of Ricardo's example of four numbers in for form of a two commodity, two country model. Ricardo intended to show by this classic example the benefits of free trade from comparative advantage, as in his example there is one country who is more proficient in producing both commodities relative to the other country. Adam Smith would likely reason, by logic of absolute advantage, that there would be no incentive for trade between the two countries. This model was expanded to many-country and many-commodity cases and also to include migration of people between countries. Major general results were obtained by the beginning of 1960's by McKenzie[25] and Jones[26], including his famous formula.
What is largest egg producing country?
The largest egg producing country is China!
Will a nation tend to export or import goods which it has a comparative advantage?
A nation will export goods for which it has a comparative advantage. By exporting goods, it has the comparative advantage because it means they have a lower opportunity cost for producing the good. A country can produce it well and can produce most likely a lot of it.
Which is the world's largest pistachio producing country?
Iran is the largest pistachio producing country.
In order for a country to specialize in production?
Countries specialize in producing certain goods for many reasons, but the most common is the condition of the soil and climate.
