Question

In a two good, two-country economy with constant marginal opportunity cost, show (mathematically or graphically) that...

In a two good, two-country economy with constant marginal opportunity cost, show (mathematically or graphically) that if neither country can benefit from trade, then it must be the case that (i) neither country has an absolute advantage in either good or (ii) one country has an absolute advantage in both goods. (show both cases)

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
True or False? 1) If Country A is absolutely better at producing everything than Country B,...
True or False? 1) If Country A is absolutely better at producing everything than Country B, then there is no incentive for Country A to engage in trade with Country B. 2) If Tom has a comparative advantage in producing corn then he must also have an absolute advantage in producing corn. 3) If Joe can produce a good at a lower opportunity cost than Fred, then Joe must have an absolute advantage in producing this good. 4) Consider the...
What is the differences between the two-country, two-good model with constant costs of production and the...
What is the differences between the two-country, two-good model with constant costs of production and the model with increasing costs of production. Adequately describe the production possibilities curves for each country in each case. Describe free-trade production and the degree of specialization in each country under both cost situations.
Using specific numbers, prove the following. If two people have the same opportunity cost of producing...
Using specific numbers, prove the following. If two people have the same opportunity cost of producing goods then there is no possibility for there to be a mutually beneficial trade. If two countries have very different opportunity costs there is a greater opportunity for mutually beneficial trades compared to two countries having different opportunity costs that are not that different. Explain why it makes sense that if a country can sell a good for a lower price than other countries...
1) If Country A is absolutely better at producing everything than Country B, then there is...
1) If Country A is absolutely better at producing everything than Country B, then there is no incentive for Country A to engage in trade with Country B ( True or False?) 2)In one day Sam can produce 40 salads or 32 sandwiches. What is the opportunity cost of producing 1 sandwich?   3)If Tom has a comparative advantage in producing corn then he must also have an absolute advantage in producing corn (T/F?) 5) In one hour John can produce...
Public goods consider an economy with two consumers, Ben and joe. there is public good in...
Public goods consider an economy with two consumers, Ben and joe. there is public good in this economy in a form of tomado series. Ben's demand for the tomado series is given by p=10-Q, and Joe's demand for tomado series is p=8-2Q. The marginal cost for providing tomado series in the markets is constant at MC=9. i) Which two properties must be satisfied for series to qualify to be public good? ii) Is there a problem for free rider problem?...
QUESTION 1 For a nation to have ________ in producing a good it must have a...
QUESTION 1 For a nation to have ________ in producing a good it must have a lower opportunity cost of producing that good than the other country. A. an absolute advantage B. an autarky advantage C. a comparative advantage D. both a comparative advantage and an absolute advantage 4 points    QUESTION 2 The relative amounts of the goods that will be exchanged for each other in trade refers to the nations' A. autarky status. B. terms of trade. C....
All question about True or False. 1.A production possibilities frontier allows us to identify the opportunity...
All question about True or False. 1.A production possibilities frontier allows us to identify the opportunity cost of producing a particular good in an economy ( T/F) 2.In the circular flow model, people earn income and spend it on goods and services. The amount spent on the goods and services becomes profit for the firm. (T/F) 3.A production possibilities frontier identifies the relationship between the quantity of a good produced and the cost of producing that good. (T/F) 4.In Country...
- Your opportunity cost of a vacation to Disney world is the price of the ticket....
- Your opportunity cost of a vacation to Disney world is the price of the ticket. (False/True) - The circular-flow diagram illustrates two markets - stock market and market for goods and services. (False/True) - Congress ought to pass a law on global warming is a normative statement. (False/True) - The concept of absolute advantage determines whether a country will engage in international trade or not. (False/True) - Italy has a higher opportunity cost in producing shoes as compared to...
Consider a Ricardian environment. Two countries (A and B) make two goods (X and Y). Country...
Consider a Ricardian environment. Two countries (A and B) make two goods (X and Y). Country A has 60 units of labor and country B has 120 units of labor. The unit labor requirements are as follows: X Y Country A 1 2 Country B 2 3 a. Draw the PPF for each country b. Calculate the autarky prices for each country (Px/Py) c. Which country has an absolute advantage in good X? Good Y? Which has a comparative advantage...
32.   Japan and China produce guns and rice. The country with the lowest opportunity cost of...
32.   Japan and China produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will A.  import guns. B.  have a comparative advantage in guns. C.  have an absolute advantage in guns. D.  have a comparative advantage in rice. 33.   If nations begin to specialize in production for the purpose of trade, A.  the utility from consumption will increase, but not the total output. B.  total world output will increase, as well as well being from consumption. C.  total world...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT