Ecuador can produce bananas at a lower opportunity cost than the United States. … They
produce only goods for which they have an export market
.
When one country can produce a lower opportunity cost?
Comparative advantage
refers to the ability to produce goods and services at a lower opportunity cost, not necessarily at a greater volume or quality. Comparative advantage is a key insight that trade will still occur even if one country has an absolute advantage in all products.
Why is it important that the country or region with the lower opportunity cost produce the good?
It is important that the country or region with the lower opportunity cost produces the good because lower opportunity cost
implies comparative advantage enjoyed by the country or region in the production of said good
. … This more production and consumption makes the country better off.
Which country has the greatest comparative advantage in the production of bananas?
Ecuador
has a comparative advantage in bananas over a long list of countries, including the United States. This comparative advantage is even better understood when you consider that their next best alternative product is oil.
Which country has an absolute advantage in the production of bananas?
Puerto Rico
has the absolute advantage in bananas, while Jamaica has the absolute advantage in sugar cane. When it comes to absolute advantage, one only has to look at the total number of products produced and whoever has more has the absolute advantage.
Which region is most likely to export bananas?
Ecuador
is the largest exporter of bananas in the world and its share of world banana trade is on the increase. Exports expanded from one million tonnes in 1985 to 3.6 million tonnes in 2000.
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 are two advantages to specialization?
Benefits of specialization include
greater economic efficiency, consumer benefits, and opportunities for growth for competitive sectors
. The disadvantages of specialization include threats to uncompetitive sectors, the risk of over-specialization, and strategic vulnerability.
What is the concept of opportunity cost?
“Opportunity cost
is the value of the next-best alternative when a decision is made; it's what is given up
,” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.
Why do countries trade with each other?
Countries trade with each other when,
on their own
, they do not have the resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.
What country sells most bananas?
| Rank Exporter Exported Bananas (US$) | 1. Ecuador $4,221,010,000 | 2. Philippines $1,608,278,000 | 3. Costa Rica $1,082,970,000 | 4. Colombia $990,338,000 |
|---|
Who is the biggest banana producer?
Bananas are predominantly produced in Asia, Latin America and Africa. The biggest producers are
India
, which produced 29 million tonnes per year on average between 2010 and 2017, and China at 11 million tonnes. Production in both countries mostly serves the domestic market.
Who is the largest importer of bananas?
| Rank Importer Imported Bananas (US$) | 1. United States $2,800,028,000 | 2. Belgium $1,158,244,000 | 3. Russia $1,116,769,000 | 4. Japan $988,411,000 |
|---|
Which country has an absolute advantage in sugar production?
Terms in this set (3)
Which country has an absolute advantage in sugar production?
Spain
, because it requires fewer total labor hours than Portugal to produce sugar.
What country has an absolute advantage?
Examples of absolute advantage
China, Thailand, and Vietnam
, on the other hand, produce and export low-cost manufactured goods. These three countries have an absolute advantage because of their considerably lower unit labor costs.
Which country has the comparative in banana?
Ecuador
has a comparative advantage in bananas over a long list of countries, including the United States.
