When a country has a comparative advantage in the production of a good it means that it can produce?
When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods.
What did Adam Smith contribute to the Enlightenment?
Compared to other major Enlightenment thinkers Adam Smith devoted most of his time towards the economic ideas of the Enlightenment Era, such as the idea of laissez-faire and the law of supply which created the basic concepts of modern economics.
What are the types of specialization?
There are two types of specialisation:
- structural specialisation (topic or map level), and.
- domain specialisation (element level).
Has an absolute advantage in the production of alfalfa and?
Answer: Rajiv has an absolute advantage in the production of alfalfa, and Rajiv has an absolute advantage in the production of barley.
What 5 Nations does the US have the biggest trade deficit with?
Top Five Trade Partners The two largest are China and Japan. Some of the largest deficits are with countries in the third category. They are Canada, Mexico, and Germany.
Why would a nation choose not to produce everything its citizens want?
why would a nation choose not to produce everything it’s citizens want? Since the dollars less it would be more expensive which can lead to the laws and customers and exports cost less. People in Britain might not want to buy from the US or have exports because for them I would be more expensive.
Why do countries not completely specialize?
Production of most goods involves increasing opportunity costs. – If a country devotes more workers to producing a good, the opportunity cost of producing more of that good will increase, causing the country to stop short of complete specialization.
Why is Adam Smith a moral philosopher?
He supported basic education when many contemporaries only saw danger in teaching the poor. And he opposed slavery when it was accepted as good business. In sum, transcending even the trilogy of ethics, economics, and jurisprudence, Smith was a moral philosopher in the fullest meaning and sense of the term.
Why China has a comparative advantage over the US in the production of televisions?
Which country has the comparative advantage in TV? China has the comparative advantage because its opportunity cost (2 TVs per shirt) is less than India’s (4 TVs per shirt). Explain why these countries can benefit from trade. Both are able to increase their consumption of TVs and shirts due to trade.
Does the US have a trade deficit or surplus with China?
The politically sensitive deficit in the trade of goods with China fell 6.7% to $26.4 billion. So far this year, the United States has recorded a trade gap of $421.8 billion, up 5.7% from January-August 2019.
Why does China have a comparative advantage?
If China can make more led light bulbs using 100 million workers than chemicals thus China has a comparative advantage. This means China can export more led light bulbs at a price that is more than the production cost while importing chemicals that are costly to make.
How does China have an absolute advantage over the United States?
China has an absolute advantage, relative to the United States, in producing consumer electronics and cheap plastic toys. Based on such a high level of poverty, the indication would be high unemployment which would transcend to lower GDP than the Saudi Arabia, US and China.