Is it true that a country needs to have an absolute advantage in the production of a good in order to benefit from trade in that good? Explain
What will be an ideal response?
Countries that do not have an absolute advantage in the production of a good can also benefit from trade. Even if a country cannot produce more of a good compared to other countries, it can still gain from the trade of that good as long as it has a comparative advantage in production. Comparative advantage is the ability of an individual, firm, or country to produce a certain good at a lower opportunity cost than other competing producers. So long as opportunity costs are not the same across countries, one country will always have a comparative advantage in producing some goods and the other country other goods.
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Defining global poverty in the context of American standards would classify most people in the developing world as poor
Indicate whether the statement is true or false
This study was the catalyst for the early 20th century reform of medical education in the United States. What was it?
a. Coolidge Commission. b. Hill-Burton Committee. c. Mangrum Report. d. Flexner Report. e. Kaiser Foundation Study.
If Japan gives up ten bushels of rice to produce one bicycle, while the United States gives up five bushels of rice to produce one bicycle, then:
a. the opportunity cost of producing bicycles in the United States is higher than in Japan. b. Japan has a comparative advantage in the production of bicycles. c. the United States has an absolute advantage in the production of rice. d. total output will be highest if the United States specializes in rice and Japan specializes in bicycles. e. total output will be highest if Japan specializes in rice and the United States specializes in bicycles.
If P = 2 and Y = 1000 . then which of the following pairs of values are possible?
a. M = $500, V = 4. b. M = $250, V = 8. c. M = $1,000 . V = 2. d. All of the above are correct.