Terms in this set (6)
Who has the absolute advantage in car washing, and who has the absolute advantage in lawn mowing? Tyler in washing , neither in mowing. Once again, in an hour, Mateo can wash 2 cars or mow 1 lawn, and Tyler can wash 3 cars or mow 1 lawn.
Who has the absolute advantage in cars?
The United States has the absolute advantage in the production of both cars and wine. It can produce more of both goods.
Who has the absolute advantage in car washing?
Ron has the absolute advantage in washing, since he can wash 3 cars per hour, while David can only wash 2 cars per hour.
Who has a comparative advantage in washing cars?
In the time it takes Tom to wash a car, he can wax 2 cars. So his opportunity cost of washing one car is 2 wax jobs. Because Tom’s opportunity cost of washing a car is lower than Ted’s, Tom has a comparative advantage in washing cars.
Who has a comparative advantage in washing cars and who has a comparative advantage in mowing lawns?
Therefore, Ron has a comparative advantage in washing cars. Similarly, David’s opportunity cos of mowing a lawn is 2 washed cars, while Ron’s opportunity cost of mowing a lawn is 3 washed cars. Therefore, David has a comparative advantage in mowing lawns. You just studied 6 terms!
What goods will a nation typically import?
Question: Which goods will a nation typically import? A. Those goods in which the nation has an absolute advantage .
What is the range of prices of electronics for which both countries could gain from trade?
What is the range of prices of electronics for which both countries could gain from trade? The price must be greater than 2 units of food but less than 4 units of food . Suppose the world consists of two countries—the United States and Mexico.
What is an example of an absolute advantage?
A clear example of a nation with an absolute advantage is Saudi Arabia , The ease with which oil is extracted which greatly reduces the cost of extraction is its absolute advantage over other nations.
Does Japan have an absolute advantage?
Japan has absolute advantage in producing both fish and cloth because one worker can produce more of either goods in Japan. Absolute advantage is determined by comparing the absolute productivity in different countries of producing each good. ... However, absolute advantage is not the critical consideration.
How do you find absolute advantage?
To calculate absolute advantage, look at the larger of the numbers for each product . One worker in Canada can produce more lumber (40 tons versus 30 tons), so Canada has the absolute advantage in lumber. One worker in Venezuela can produce 60 barrels of oil compared to a worker in Canada who can produce only 20.
Who has the absolute advantage in mowing lawns?
The neighborhood kid’s opportunity cost of mowing LeBron’s lawn is $32. LeBron James has an absolute advantage in mowing lawns because he can do the work in less time.
Terms in this set (30) Comparative advantage is related most closely to which of the following? Opportunity Cost . When each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy....
Would LeBron benefit from a trade?
Would LeBron benefit from a trade? Yes! As long as LeBron pays Scotty more than $32 to mow his yard then they both benefit from the trade.
What is the difference between comparative advantage and absolute advantage?
Absolute advantage refers to the ability to produce more or better goods and services than somebody else. Comparative advantage refers to the ability to produce goods and services at a lower opportunity cost , not necessarily at a greater volume or quality.
When two people produce efficiently and then make a mutually agreeable trade based on comparative advantage?
When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage, they both obtain consumption outside their production possibilities frontier . they both obtain consumption inside their production possibilities frontier.
When a country allows trade and becomes an exporter of a good?
When a country allows trade and becomes an exporter of a good, domestic producers of the good are better off , and domestic consumers of the good are worse off. Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers.
