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Beta’s opportunity cost of producing 8 units of nuts is 6 units of coffee. A. Yes. Absolute advantage is a country’s ability to produce a given product more efficiently than can another country; comparative advantage is a country’s ability to produce a given product relatively more efficiently than can another country.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.Comparative advantage is used to explain why companies, countries, or individuals can benefit from trade. When used to describe international trade, comparative advantage refers to the products that a country can produce more cheaply or easily than other countries.
| A | B |
|---|---|
| comparative advantage | a situation in which a country specializes in the production of a good or service at which it is relatively more efficient |
| balance of payments | the difference between the amount of money that comes into and the amoun to goods that go out |
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When a nation produces the goods and services it can produce relatively more efficiently compared to other countries?
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 is it called when a country is able to produce more than another country?
Comparative advantage is used to explain why companies, countries, or individuals can benefit from trade. When used to describe international trade, comparative advantage refers to the products that a country can produce more cheaply or easily than other countries.
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When a country’s goods and services are relatively efficient?
| A | B |
|---|---|
| comparative advantage | a situation in which a country specializes in the production of a good or service at which it is relatively more efficient |
| balance of payments | the difference between the amount of money that comes into and the amoun to goods that go out |
What is it called when a country makes efficient choices about what it produces based on the resources that they have and what they are good at?
A production possibilities frontier, or PPF, defines the set of possible combinations of goods and services a society can produce given the resources available. Choices outside the PPF are unattainable (at least in any sustainable way), and choices inside the PPF are inefficient.
What is the difference between absolute and comparative advantage?
Absolute Advantage: The ability of an actor to produce more of a good or service than a competitor. Comparative Advantage: The ability of an actor to produce a good or service for a lower opportunity cost than a competitor.
What is meant by absolute advantage?
absolute advantage, economic concept that is used to refer to a party’s superior production capability. Specifically, it refers to the ability to produce a certain good or service at lower cost (i.e., more efficiently) than another party.
Which of the following refers to the ability of a nation to produce a good more efficiently?
Absolute advantage refers to the ability of a country to produce a good more efficiently than other countries. In other words, a country that has an absolute advantage can produce a good with lower marginal cost (fewer materials, cheaper materials, in less time, with fewer workers, with cheaper workers, etc.).
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A country has an absolute advantage in the production of a good when it can produce it more efficiently than other countries.
What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy?
What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy? The country is operating on its production possibilities frontier.
How can a nation that is less efficient than another nation in the production of all commodities export anything to the second nation?
A less efficient nation can also export to the more efficient nation by implementing and incorporating competitive advantage in its international trade policies.
What economic term refers to the goods and services that a nation buys from other nations?
Imports. the goods and services that a nation buys from other nations.
When countries rely on one another for resources goods or services it is called?
Interdependence. A relationship between countries in which they rely on one another for resources, goods or services.
When a nation has a comparative advantage in some product this means that?
When a country has a comparative advantage in producing certain items, it means the nation can make the products at a lower cost than other countries.
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What does efficiency mean in economics?
Economic efficiency is when all goods and factors of production in an economy are distributed or allocated to their most valuable uses and waste is eliminated or minimized.
What does comparative advantage mean in economics?
comparative advantage, economic theory, first developed by 19th-century British economist David Ricardo, that attributed the cause and benefits of international trade to the differences in the relative opportunity costs (costs in terms of other goods given up) of producing the same commodities among countries.
What is economically interdependent?
Economic interdependence refers to some measure of the value of economic transactions between two countries, or between a country and the rest of the world, perhaps scaled to total national output or to some measure of total financial assets.
What globalization means?
Globalization is the word used to describe the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.
What is absolute and comparative advantage in international trade?
The Absolute Advantage is the country’s inherent ability to produce specific goods efficiently and effectively at a relatively lower marginal cost. However, Comparative Advantage refers to the country’s capability to produce the specific good at lower marginal cost and opportunity cost.
What is the difference between competitive and comparative advantage?
Comparative advantage is when a company can produce goods at a lower opportunity cost than its competitors. Opportunity cost is the cost that must be endured when selecting one option over the other. Competitive advantage represents any benefits and advantages that a company may have over its competitors.
What do you mean by trade deficit?
: a situation in which a country buys more from other countries than it sells to other countries : the amount of money by which a country’s imports are greater than its exports. We have an annual trade deficit of $6.2 billion.
What is the difference between comparative advantage and absolute advantage Brainly?
Absolute advantage refers to the uncontested superiority of a country or business to produce a particular good better. Comparative advantage introduces opportunity cost as a factor for analysis in choosing between different options for production diversification.
What do you mean by domestic trade?
Domestic trade, different from international trade, is the exchange of domestic goods within the boundaries of a country. This may be sub-divided into two categories, wholesale and retail.
When one nation can produce a product at lower cost relative to another nation?
The theory of comparative advantage holds that even if one nation can produce all goods more cheaply than can another nation, both nations can still trade under conditions where each benefits. Under this theory, what matters is relative efficiency.
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What is mercantilism theory?
What is mercantilism? Mercantilism is an economic practice by which governments used their economies to augment state power at the expense of other countries. Governments sought to ensure that exports exceeded imports and to accumulate wealth in the form of bullion (mostly gold and silver).
What causes absolute advantage?
Absolute advantage can be accomplished by creating the good or service at a lower absolute cost per unit using a smaller number of inputs, or by a more efficient process.
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