What does it mean when a country has a comparative advantage in the production of a good compared to another country?
Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. … Comparative advantage suggests that countries will engage in trade with one another exporting the goods that they have a relative advantage in.
What does it mean when we say that a country has a comparative advantage in producing a product?
A comparative advantage exists when a country can produce goods at a lower opportunity cost compared to other countries. It is not possible for a country to have a comparative advantage in all goods.
When a country has a comparative advantage in the production of a good it means that it can produce quizlet?
A country has comparative advantage in the production of a good if it can produce that good at a lower opportunity cost relative to another country. the difference between the opportunity cost of producing the product domestically versus the cost of purchasing the product from another country receives from trade.
What does it mean to have a comparative advantage in the production of something?
A person has a comparative advantage at producing something if he can produce it at lower cost than anyone else. Having a comparative advantage is not the same as being the best at something. In fact someone can be completely unskilled at doing something yet still have a comparative advantage at doing it!
When a nation has a comparative advantage in the production of a particular good?
A country has a comparative advantage when a good can be produced at a lower cost in terms of other goods. Countries that specialize based on comparative advantage gain from trade.
What is the comparative advantage of the Philippines in international trade?
The Philippines has a revealed comparative advantage in exporting from high technology industries. They constitute more than 50 percent of total goods exports and they were affected during the global financial crisis.
How do countries know when they have a comparative advantage in the production of a good?
Countries have a comparative advantage in production when they can produce a good or service at a lower opportunity cost than other producers. Countries are better off if they specialize in producing the goods for which they have a comparative advantage.
When a person has a comparative advantage in producing a good or service the person has?
Comparative advantage refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another. Even if one country has an absolute advantage in producing all goods different countries could still have different comparative advantages.
What countries have comparative advantage?
For example Ireland has a comparative advantage in cheese and butter due to climate and a large amount of land suitable for dairy cows. China has a comparative advantage in electronics because it has an abundance of labor.
When a nation has a comparative advantage in the production of a particular good quizlet?
What do economists mean when they say a country has a comparative advantage in the production of a particular good? That the country can produce the good at a lower opportunity cost than other countries. Based on the production schedule below who has a comparative advantage in clams? You just studied 15 terms!
Who has the comparative advantage in the production of good a quizlet?
A producer has a comparative advantage in the production of a good if that producer can produce the good using fewer inputs than other producers. You just studied 8 terms!
Which country has a comparative advantage in the production of shirts?
The United States has the comparative advantage in making shirts. In the United States the opportunity cost of making one shirt is giving up 1/3 boot but Canada’s opportunity cost of making 1 shirt is 1 boot.
What is an example of a comparative advantage?
Who has comparative advantage example?
For example if a country is skilled at making both cheese and chocolate they may determine how much labor goes into producing each good. If it takes one hour of labor to produce 10 units of cheese and one of of labor to produce 20 units of chocolate then this country has a comparative advantage in making chocolate.
What does it mean for a nation to have an absolute advantage in the production of a good quizlet?
if a nation has an absolute advantage in the production of a good it can produce that good using fewer resources than its trading partner. If a nation has a comparative advantage in the production of a good it can produce that good at a lower opportunity cost than its trading partner.
Which country has a comparative advantage in the production of honey?
What is comparative advantage quizlet?
What is a comparative advantage? Comparative advantage refers to the ability to produce goods and services at a lower opportunity COST not necessarily at a greater volume. … Its opportunity costs of producing goods at a lower than those of its trading partners.
How do you identify comparative advantage?
To calculate comparative advantage find the opportunity cost of producing one barrel of oil in both countries. The country with the lowest opportunity cost has the comparative advantage.
What are the advantages of the Philippines?
Various descriptions to illustrate the country’s advantages are the country’s strategic location hardworking and English-speaking people continuous infrastructure for global growth democratic government liberalized economy etc.
What is the competitive advantage of Philippine tourism?
As the Philippines has a natural competitive advantage in tourism because of the warmth of its people and its natural wonders that are yet to be fully harnessed the government recognizes tourism as a major contributor to the generation of foreign exchange earnings investments and revenues and to the growth of the …
What are the advantages of world trade open in the Philippines?
A primary benefit gained from participating in the WTO is that trade liberalization takes place on a multilateral basis. This means that the opening of the Philippine market would be compensated by the opening up of all other member-countries’ markets.
What does it mean for a nation to have an absolute advantage in the production of a good?
What happens when countries specialize according to their comparative advantage quizlet?
According to this theory if countries specialize in and export the goods in which they have an absolute advantage (can produce with fewer resources) there results an improvement in resource allocation and increased production and consumption in each country. … Forms the basis of the theory of comparative advantage.
Which country has the comparative advantage in oil production?
What are sources of comparative advantage?
In this chapter we consider the major sources of comparative advantage: differences in technology resource endowments and consumer demand and also the existence of government policies economies of scale in production and external economies.
What products the US has a comparative advantage?
The United States has a revealed comparative advantage in exporting capital goods chemicals miscellaneous goods plastics rubber and transportation.
Which country has a comparative advantage in the production of cotton?
In which situation does one country have a comparative advantage over another country quizlet?
one country has comparative advantage over another in the production of a particular good relative to other goods if it produces that good less inefficiently (more efficiently) compared with the other country.
Which country has absolute advantage and which has comparative advantage in wheat production?
What has a comparative advantage in the production of red socks and has a comparative advantage in the production of white socks?
Which city has a comparative advantage in the production of each color sock? If they trade socks Boston will produce white socks for export because it has the comparative advantage in white socks while Chicago produces red socks for export which is Chicago’s comparative advantage.
Who has an absolute advantage in producing T shirts?
Who has the absolute advantage in making tshirts and who has the absolute advantage in making jeans? Peter has the absolute advantage in making tshirts and Olivia has the absolute advantage in making jeans. Peter can make 40 tshirts in one hour or 10 pairs of jeans in one hour.
What is the difference between comparative advantage and absolute advantage quizlet?
Absolute advantage is the ability to produce a good using fewer inputs than another producer while comparative advantage is the ability to produce a good at a lower opportunity cost than another producer (reflecting the relative opportunity cost). … Comparative advantage is more important for trade.
Which nation has the comparative advantage in the production of milk?
Now that we know that Bangladesh has a comparative advantage in garments and the U.S. has a comparative advantage in milk we can figure out how the countries should specialize their production and then identify the benefits of trade. Countries should specialize in the goods where they have a comparative advantage.
Which country has the comparative advantage in the production of washing machines?
The US has a comparative advantage in the production of washing machines.
Comparative Advantage Practice
ECF330 Unit 1 Session 4
Comparative advantage specialization and gains from trade | Microeconomics | Khan Academy
Comparative advantage worked example | Basic economics concepts | AP Macroeconomics | Khan Academy