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Comparative Advantage

Discussion Questions

1. The market for chicken sandwich, considered a normal good, is in equilibrium. Examine the effect of the following events on the equilibrium price and quantity of chicken sandwich. (a) An increase in consumers' preference for beef (b) Producers expectation of future profit 2. President Obama is considering implementing tr

Plot the PPC of a nation

Plot the PPC of a nation given by the following data. (attached) a. Calculate the marginal opportunity cost of each combination. b. What is the opportunity cost of combination C? c. Suppose a second nation has the following data. Plot the PPC, and then determine which nation has the comparative advantage in which activity.


Suppose that there are two states that do not trade: Iowa and Nebraska. Each state produces the same two goods: corn and wheat. For Iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of corn. For Nebraska the opportunity cost of producing 1 bushel of corn is 3 bushels of wheat. Present production is:

Globalization arguments in terms of labour and growth

Opponents of globalization argue that off shoring leads to a loss of jobs in the county that transfers jobs to lower-wage countries. Evaluate all aspects of this argument. Supporters of globalization argue that off shoring benefits a country's economy. Evaluate.

Terns from Rice Island to East Sand Island

Story can also be found on http://wdfw.wa.gov/factshts/terns.htm Move the Terns Environmental groups have tried for two years to breach four hydroelectric dams on the Columbia River's main tributary, the Snake River, in an effort to give fish easier access to spawning grounds. But both Republican and Democratic members o

Supply: Production, Costs, and Profits

Please provide a detailed explanation on the following questions. Include a diagram and at least 200 words. 1. How does trade affect the production possibilities frontier? 2. Give an argument for or against trade. Explain your reasons. 3. What should government do to support your argument?

calculating opportunity costs, production possibility

There are five exercises in this solution set. The problem set is attached. For convenience sake, I am providing the question in Exercise 1: Use the following production possibility tables for war goods and civilian goods. Production Alternatives Type of Production A B C D E

Trading notes

PLease help! Describe how international trade affects our economy. How the concept of comparative advantage was relevant to the trade negotiations? You may use the following scenarios in your discussions. Imagine that you belong to one of the following Island. Crusoe Island · Abundant population ·

Value of a share of Sonora Company Stock.

Sonora Corporation expects a 3 year comparative advantage period. Sonora's free cash flow during these 3 years are estimated to be $5 million, $7 million, and $9 million. After the comparative advantage period is over, free cash flow is expected to increase at a rate of 5% per year. Sonora currently has $25 million of debt an

Absolute and Comparative Advantage, Shape of the PPF

1. (Absolute and Comparative Advantage) You have the following information concerning the production of wheat and cloth in the United States and the United Kingdom: Labor Hours Required to Produce One Unit United Kingdom United States Wheat 2 1 Cloth 6 5 a. What is the opportunity of producing a unit of wheat

Macro Economic Questions

1. According to the text, economics is the study of how: A) governments allocate resources in the face of constraints. B) government policies can be used to meet individuals' wants and desires. C) human beings coordinate their wants and desires in the face of constraints. D) scarce resources are allocated to their m


1. Two individuals are having a picnic. Jane brings 8 litres of soft drinks and 2 sandwiches. Bob, on the other hand, has 2 litres of soft drinks and 4 sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of soft drinks for sandwiches is 3, and Bob's MRS is equal to 1. Draw an Edgeworth box diagram t

International trade, tariffs, and the Heckscher-Ohlin theory

an international economist you have been asked to prepare a short speech which answers the following questions: 1. How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns? 2. The Heckscher-Ohlin theory demonstrates how trade affects the distribution of income withi

Introduction to Economics 1-2 pg IP

As a manager of a financial planning business you have two financial planners, Phil and Francis. In an hour, Phil can produce either one financial statement or answer 8 phone calls, while Francis can either produce 2 financial statements or answer 10 phone calls. Does either person have an absolute advantage in producing both pr


Deliverable Length: 2-3 pages Select a U.S. multinational company. In terms of currency denomination, discuss how the firm prices its revenues and costs. For MNE's with multiple foreign operations, consider any one of those operations and the contribution it is making to the parent firm's profits. Using this information, w

comparative advantage instances

Would there ever be an instance in which a relatively small country could benefit from comparative advantage with a much larger country? What would that situation look like? What circumstances might tend to lend themselves to benefit smaller countries for trade with larger ones?

Comparative Advantage

Define the concept of comparative advantage. How can a country gain or lose its comparative advantage in the production of a good?

Absolute and Comparative Advantage

Please see the attached file. 1. (25 points) Assume Nebraska and Virginia each have 100 acres of farmland. The following table gives hypothetical figures for yield per acre in the two states: Nebraska Virginia Wheat 9

Comparative Advantange and Competivtive Advantage

Discuss the difference between comparative advantage and competitive advantage with reference to beer pricing. Corona is priced higher is the U.S. than Mexico, however American beer is priced higher in Mexico than in U.S.

Economics: Internation Business

A. Construct a quantitative example to illustrate the principle of comparative advantage. b. What are dynamic effects of free trade and why might they be important?

Offshoring of White Collar Services Jobs

What is offshoring of white-collar service jobs, and how does it relate to international trade? Why has it recently increased? Why do you think more than half of all the offshored jobs have gone to India? Give an example of how offshoring can eliminate some U.S. jobs while creating other U.S. jobs.

outsourcing of human resources

The outsourcing of human resources (ex, call centers in India) becomes an important part of U.S. firms in recent years. How would you explain this in relation to firm's profit maximization goal? US firms has been criticized for hiring cheap foreign labor and therefore contributing high unemployment rate in U.S. Does "made in U.S

Comparative advantage explanation, drawing production possibilities curves

Suppose that, with a given unit of labour, India can produce 40 basketball hoops or 60 basketballs and Nepal can produce 10 basketball hoops or 30 basketballs. This scenario is illustrated below. output hoops (H) balls (B) India 40 60 Nepal 10 30 a.) Explain absolute and comparative advantage for India and Nepal