Q: What is free trade and what are the benefits of free trade as suggested by the principle of…
A: FREE TRADE Free trade is, in the simplest terms, the total absence of government policies which…
Q: Discuss whether a government should always pursue a policy of free trade
A: The capacity of countries to import and export goods without tariffs or other restrictions is…
Q: When Oz land closes off to trade, it notices that the number of firms in an industry double in size.…
A: Cournet theory explains the given phenomenon while the others does not. The Cournet model of…
Q: If there is trade, which of the following is most likely? A. A country’s consumption…
A: Trade means the exchange of goods and services.
Q: What is a free trade
A: The term trade refers to the buying and selling of commodities and this buying and selling can be…
Q: Is absolute advantage or comparative advantagemore important for trade? Explain your reasoningusing…
A: Meaning of Trade/International Trade: International trade or trade refers to the exchange of…
Q: Suppose Argentina produces only two goods: corn and DVDS. The following graph shows Argentina's…
A: Points located inside the PPF ie A and F represent inefficient output combination. At these points,…
Q: Melitz explains that under free trade
A: In an asymmetric two-country Melitz model, unilateral trade liberalization improves the masses and…
Q: Explain the concept of comparative advantage and how it is related to the benefit that nations…
A: The law of comparative advantage was developed in 1817 by David Ricardo to explain why countries…
Q: The New York Times (Nov. 30, 1993) reported that “the inability of OPEC to agree last week to cut…
A: A cartel is a formal organization of producers of a commodity inorder to increase profits by…
Q: If a country chose to produce twice as many wooden chairs as before, how would that affect its…
A: Law of increasing cost implies that if a producer increases the production of one good, then he…
Q: Define free trade
A: Trade is defined as the exchange of services or goods among individuals and countries in exchange…
Q: How does comparative advantage play a key role in specialization & trade ?
A: Comparative advantage refers to the ability of country to produce the goods and services lower…
Q: What is the critical evaluation of comparative cost theory?
A: A country will create things at a lower opportunity cost and will do it in a way that maximizes…
Q: Technology has increased trade? True or False
A: Technology has affected the world in a very much positive way.
Q: Consider two competitive economies that have the same quantities of labor (L = 400) and capital (K =…
A: A firm uses different combinations of factors of production such as labor and capital to produce…
Q: An argument for free trade is that it can raise the standard of living by making more goods…
A: The exchange of goods and services among entities or individuals within or among countries is known…
Q: Directions: Calculate the per unit opportunity cost for soybeans and sugar in the United States and…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Consider two countries, Spain and Russia and two goods, wine and vodka. Labour is the only factor of…
A: STEP 1 SPAINUnit labour requirement for wine = 2Unit labour requirement for vodka =22 Wages = W…
Q: Microeconomics is the study of: The gains from trade since we can only consume what we produce…
A: Micro economics facilitates easy understanding of our economic system.
Q: Countries have different endowments of factors of production which leads to the law of comparative…
A: Factors of production: - The inputs that are used to produce goods and services are known as the…
Q: What are the disadvantages of Free Trade
A: Meaning of Free Trade: The term free trade refers to the situation under which there are no…
Q: What phenomenon DIRECTLY relates to gains from trade? a. rationality b. trade-offs c. specialization…
A: Gains from trade is the net benefit any country receives when they get involved in trading with…
Q: Discuss the pros and cons of free trade.
A: Although free trade and the effects of tariffs on the global economy are hotly debated topics, they…
Q: There are two countries: Country A and Country B. These countries have the same amount of resources…
A: Comparative Advantage occurs when a country produce the good efficiently and relatively at a lower…
Q: If one country can produce a good with fewer resources than another country, this is calleda.…
A: Specialization:- Specialization is a manufacturing approach in which an organization pay more…
Q: Explain the difference between absolute and comparative advantage in relation to trade and give an…
A: Absolute advantage and comparative advantage are two important ideas in worldwide business and…
Q: he law of one price says that the price of... a. Labour, measured in terms of its opportunity…
A: Law of one price states that price of identical product or good would be same across the market if…
Q: Consider the following model of trade between Home and Foreign. Assume throughout that those two…
A: PR×QR=23M...............(1)PC×Qc=13M................(2)
Q: Directions: Calculate the per unit opportunity cost for soybeans and sugar in the United States and…
A: Comparative advantage can be understood by comparing the opportunity cost of every country for…
Q: United States Canada Corn Corn 60 60 60 20 Peanuts Peanuts The United States and Canada have the…
A: Both the countries stand to gain from particular terms of trade when the relative trade price sits…
Q: The New York Times (Nov. 30, 1993) reported that "the inability of OPEC to agree last week to cut…
A: OPEC or Organisation of the Petroleum Exporting Countries is a cartel of Oil-producing nations which…
Q: Analyze the following two countries with linear (constant opportunity cost) production functions.…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: Use the information in the table below to answer the following questions. Production per unit of…
A: Hi! thank you for the question but as per the guidelines, we answer up to 3 sub-parts at one time.…
Q: Which of the following statements is TRUE? Output per Day of Work Food Clothing Country A Country B…
A: The capacity of an economy to produce a certain item or service at a lower opportunity cost than its…
Q: State whether each entry below is positive or normative—explain your answer. Low-income people pay…
A: Positive and normative economics are correctly referred to as the two arms of economics. Positive…
Q: why would division of labor without trade not work?
A: Division of labor: It can be explained as the division of labor under the specialization they hold.…
Q: Which of the following BEST describes comparative advantage?
A: Opportunity-cost plays the main role in comparative-advantage. In economics, opportunity-cost is…
Q: Consider the following model of trade between Home and Foreign. Assume throughout that those two…
A: The principle of absolute advantage states the ability of a party for production of a service or…
Q: The New York Times (Nov. 30, 1993) reported that “the inability of OPEC to agree last week to cut…
A: The statements are given below with the reasons why they are true or false: The members of OPEC were…
Q: INTERNATIONAL TRADE A country imposing a tariff can benefit in terms of social welfare if A. If it…
A: Ans:- Option B :- if it is small
Q: Two countries (A and B) produce tea and oranges using labor. The number of hours of labor required…
A:
Discuss scale economies as they apply to trade.
Step by step
Solved in 2 steps
- How does specialization increase production?When Oz land closes off to trade, it notices that the number of firms in an industry double in size. What economic theory would help us explain this phenomenon?Table 19.15 shows how the average costs of production for semiconductors (the "chips" in computer memories) change as the quantity of semiconductors built at that factory increases. a. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale? b. If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors? 50,000 semiconductors? 30,000 semiconductors? c. Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers. Quantity of Semiconductors 10,000 20,000 30,000 40,000 100,000 Table 19.15 Average Total Cost $8 each $5 each $3 each $2 each $2 each
- there are many benefits to free trade.what 2 (two) benefits do you believe are most important and why did you select them as most important?Using your own words, describe the law of increasing opportunity costs. Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.Countries trade to achieve economies of scale in production. Show in diagram(s) how nations (e.g. China and USA) can benefit from their specialisation in the production of goods and services with internal economies of scale (only a limited range of goods and services (e.g. China specialising in compact cars while USA specialising in large continental cars).
- Explain the importance of opportunity costs to decision-making and how opportunity costs lead to tradeI've already read the answer provided on this site, but it is not giving me the information I need. I understand the math for finding the opportunity costs for each item in each country. However, where are they getting the answer that 2.5 tons of chemicals is what the US will give up, and 1 ton of apparel is what China will give up? From videos I've seen on youtube, they basically state that as long as the cost is less than what the original opportunity cost is, then nations will trade. So, it costs China 4 apparel for every 1 ton of chemicals, and in the US it costs 1 apparel for every 3 tons of chemicals. Am I right to assume that as long as China can trade less than 4 apparel it will benefit, and as long as the US can trade less than 3 tons of chemicals it will benefit? If so, then what is the math being used to arrive at exactly 1 ton of Chemicals for 1 ton of Apparel for China, and 1 apparel for 2.5 tons of Chemicals for the US? I need to understand the math that is used to…What is free trade and what are the benefits of free trade as suggested by the principle of comparative advantage?
- What is the per-unit opportunity cost of product Y as production moves from point D to point A?Write one example each for the four strategies for Global Product planning. You can search in Google. Briefly write the example in two three sentences. (Note: Examples given in handout is not accepted) Strategy Strategy 1: Dual extension Example Strategy 2: Product extension communication adaptation Strategy 3: Product adaptation Communication extension Strategy 4: Dual adaptationMelitz explains that under free trade