a country is said to have an absolute advantage in the production of a good when: course hero

What happens when a country has a comparative advantage?

Absolute Advantage A country is said to have an absolute advantage in the production of a good when it can produce the same amount of the good by using fewer resources than another country. Both countries using ALL of their resources to produce does not equal to both countries using same amount of resources to produce.

What is the difference between absolute and comparative advantage?

A country is said to have an absolute advantage in a good over another country if that first country can produce more units of the good. is a more efficient producer of the good. is a major consumer of the good. has a lower opportunity cost of producing the good The crowding-out effect suggests that

What is the difference between specialization and absolute advantage?

Jan 27, 2015 · View Homework Help - GAINS FROM TRADE from ECON 1bb3 at McMaster University. INTERDEPENDENCE AND THE GAINS FROM TRADE A country is said to have an absolute advantage in the production of a good when

Which country has a comparative advantage in the production of cloth?

Jan 16, 2021 · Explanation A country is said to have comparatve advantage in the producton of a commodity if the opportunity cost of producing that good is lower compared to the opportunity cost of the good being produced by its trading partner.

What is absolute advantage?

Absolute advantage states that a country has an advantage over another if it can produce a good with fewer resources. True or False. False. Trade occurs only when a country has an absolute advantage and not just a comparative advantage over another country. True or False.

Which country has the comparative advantage in both goods?

If England uses one week's time to produce ten yards of cloth or two barrels of wine and Portugal uses one week's time to produce twelve yards of cloth or six barrels of wine, England has the comparative advantage in both goods. England has a comparative advantage in the production of cloth.

What does "false" mean?

False. Countries that are unable to produce goods as efficiently as other countries will never be able to trade. True or False. True. If all countries produce the goods for which they have comparative advantages, all countries benefit with the increased production of goods with no additional resources being used.

Is there a comparative advantage in trade?

Yes, in theory, although not in reality. A. neither has a comparative advantage, and there are no gains from trade. If the production possibilities curves of two countries have the same slope, A. neither has a comparative advantage, and there are no gains from trade.