The United States would trade food to Canada and Canada would trade televisions to the United States. We see that the United States can produce food less expensively than Canada can, so the United States has a comparative advantage in producing food.
What does Switzerland have a comparative advantage in?
In the example above, Switzerland has a comparative advantage in the production of chocolate . By spending one hour producing two pounds of chocolate, it gives up producing one pound of cheese, whereas, if it spends that hour producing cheese, it gives up two pounds of chocolate.
What does France have a comparative advantage in?
In other words, France has a comparative advantage in wine production . This also means that if the United States has a comparative advantage in one of the two goods, France must have the comparative advantage in the other good.
Which gives a country a comparative advantage?
In economic terms, a country has a comparative advantage when it can produce at a lower opportunity cost than that of trade partners . While a country cannot have a comparative advantage in all goods and services, it can have an absolute advantage in producing all goods.
What does Japan have a comparative advantage in?
Since Japan’s opportunity cost is lower, Japan has comparative advantage on fish production and will export fish. The comparative advantage of cloth is found the same way.
How has Swiss specialization been adapted to the Austrian economy?
Switzerland’s highly skilled work force allows the nation’s people to maintain a high standard of living. How has Swiss specialization been adapted to the Austrian economy? Much of Austria’s economic activity centers on specialized industries : manufacturing, machine tools, chemicals, and textiles.
Which country has a comparative advantage in cheese?
France has a comparative advantage in cheese because its opportunity cost is lower (one- eighth car versus one-half car in Germany).
What country has an absolute advantage with wine Why is that?
The United States has the absolute advantage in the production of both cars and wine. It can produce more of both goods.
Which country has comparative advantage in wine?
Portugal has an absolute advantage in the production of both goods, because it can produce more cloth and wine than Britain using the same amount of labor. Portugal has a comparative advantage in wine, because it is 3 times more productive in wine, but only 1.5 times as productive in cloth.
What is an example of a comparative advantage?
Comparative advantage is what you do best while also giving up the least . For example, if you’re a great plumber and a great babysitter, your comparative advantage is plumbing. That’s because you’ll make more money as a plumber.
Which situation is the best example of opportunity cost?
It is the important concept in economics and also the relationship which is between choice and scarcity. A good example of opportunity cost is you can spend money and time on other things but you can not spend time reading books or the money in doing something which can help .
Which scenario is the best example of an opportunity cost?
The correct answer is a. A computer company produces fewer laptops to meet tablet demand . Opportunity cost defines the benefit obtained by having a commodity after forgoing some other commodity. In the problem statement, the computer company incurs an opportunity cost of laptops for tablets.
What is South Korea comparative advantage?
South Korea’s comparative advantage lies in technology and design , not in resource-intensive heavy-manufacturing industries, which will inevitably lose market share to competitors in China.
How do you find comparative advantage?
Taking this example, if countries A and B allocate resources evenly to both goods combined output is: Cars = 15 + 15 = 30; Trucks = 12 + 3 = 15, therefore world output is 45 m units. It is being able to produce goods by using fewer resources, at a lower opportunity cost , that gives countries a comparative advantage.
Does Japan have an absolute advantage in cars?
Since Japan is more efficient in the production of cars and the United States is more efficient in the production of food, Japan has an absolute advantage in the production of cars and the United States has an ab- solute advantage in the production of food. ... To produce this car Japan needs six units of labor.
Which country has the best Alps?
- Chamonix Mont-Blanc, France. Everything about Chamonix is impressive. ...
- Davos, Switzerland. ...
- Garmisch-Partenkirchen, Germany. ...
- Grindelwald, Switzerland. ...
- Kitzbühel, Austria. ...
- Lech-Zürs, Austria. ...
- Megève, France. ...
- Seefeld, Austria.
