What does it mean to have an absolute advantage in the production of two goods?
What will be an ideal response?
Having an absolute advantage in the production of two goods means that, when producing solely good A or solely good B, you can produce more than your competitor.
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The efficient scale of the firm is the quantity of output that
a. maximizes marginal product. b. maximizes profit. c. minimizes average total cost. d. minimizes average variable cost.
Suppose a firm in each of the two markets listed below were to increase its price by 15 percent. In which pair would the firm in the first market listed experience a dramatic decline in sales, but the firm in the second market listed would not?
a. cotton and soybeans b. gasoline and corn c. #2 lead pencils and college textbooks d. electricity and cable television
When you use a service like Facebook for free, it is likely that:
A. the provider is almost invariably a nonprofit company. B. you are both the customer and the product. C. you are not the customer; you are the product. D. the provider is almost never a nonprofit company.
What theory argues that free trade is beneficial, but that differences in factor endowments, not productivity, determine the pattern of international trade?
What will be an ideal response?