Looking for an answer to the question: Will a nation import or export a good in which it has a comparative advantage, and why? On this page we have collected for you the most accurate and comprehensive information that will fully answer the question: Will a nation import or export a good in which it has a comparative advantage, and why?
In other words, if each nation chose to only produce computers, they would each produce 12,000, but if each nation chose to only produce food, the United States would produce 12,000 bushels and Japan would only produce 4,000 . At first glance it might seem as if the two nations – particularly the United States – have no reason to engage in foreign trade.
What has 5 fingers but isn’t alive?International trade works the same way, only on a larger scale. To illustrate, let’s assume that there are only two countries on earth – the United States and Japan – and that they only produce two products: food and personal computers. The following two tables show the production opportunities per week for each nation.
The basic reason for foreign trade is quite simple: some nations are better at producing certain things than others. This means that they are all better off economically if they specialize in what they do best and trade some of their production for the goods of other nations that also specialize in what they do best.
How big will a japanese maple tree get?What are the advantages of import and export?
Maintaining a good relationship between import and export is related to trade balance. Importing goods brings new and exciting products to the local economy and allows new products to be manufactured locally. Exporting products boosts the local economy and helps local businesses increase their revenues.
Why you should buy a manufactured home?What is an example of comparative advantage?
Comparative advantage is what you do best and at the same time give up the least. For example, if you are a great plumber and a great babysitter, your comparative advantage is plumbing. That’s because you make more money as a plumber.
Who has a comparative advantage?
A person has a comparative advantage in making something if they can make it at a lower cost than anyone else. Having a comparative advantage is not the same as being the best at something. In fact, someone can be totally inexperienced at doing something but still have a comparative advantage in doing it!
Why did my washing machine leak?Why is import and export important?
Exports and imports are important for the development and growth of economies because not all countries have the resources and skills needed to produce certain goods and services. Nevertheless, countries impose trade barriers such as tariffs and import quotas to protect their domestic industry.
How can imports pose a problem for an economy?
An absolute advantage belongs to the economy that can produce the most regardless of its opportunity cost. … How can imports pose a problem for an economy? Imports represent money leaving the country and negatively affect a country’s GDP. Pick TWO reasons a company might choose to outsource.
When is a country that imports a particular good imposed?
When a country importing a particular good imposes a tariff on that good, consumer surplus and the total surplus in the market for that good decrease. See Figure 9-14.
What role do exports and imports play in the US economy?
Expanding the output of America’s most competitive industries and products through exports boosts US incomes. … Effects like this help boost America’s rate of economic growth. In addition, imports increase consumer choice and help keep prices low, increasing consumer spending power.
Which countries have a comparative advantage?
For example, Ireland has a comparative advantage in cheese and butter due to climate and a large amount of land suitable for dairy cows. China has a comparative advantage in electronics because it has an abundance of workers.
What happens when a country has a comparative advantage?
Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. … Comparative advantage suggests that countries trade with each other and export the goods in which they have a relative advantage.
Can a nation have a comparative advantage in every good?
It is not possible for a country to have a comparative advantage in all goods. However, a country can have an absolute advantage in all goods. Absolute advantage is when a country is simply the best (most efficient) at producing a product or service.
Export the good, do you have a comparative advantage?
Comparative advantage suggests that countries trade with each other and export the goods in which they have a relative advantage. Absolute advantage refers to a country’s undisputed superiority in producing a particular good better.
If a country allows trade and becomes an exporter of a good, what happens to consumer surplus?
8) When a country allows trade and becomes an exporter of a good, D. consumer surplus falls and producer surplus rises.
What good will a nation typically import?
Question: What goods will a nation typically import? A. The goods where the nation has an absolute advantage.
When a country allows trade and becomes an exporter of a commodity?
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 increases a nation’s economic well-being in the sense that the gains of the winners outweigh the losses of the losers.
Will a country import or export products where it has a comparative advantage?
Comparative Advantage More specifically, countries should import goods when the opportunity cost of importing them is lower than the cost of their local production. Comparative advantage specialization leads to a more efficient allocation of world resources.
What is an example of comparative advantage?
Comparative advantage is what you do best and at the same time give up the least. For example, if you are a great plumber and a great babysitter, your comparative advantage is plumbing. That’s because you make more money as a plumber.
Under what conditions is the limit of production possibilities linear?
With constant opportunity cost, a straight-line (linear) PPF results. This case reflects a situation where resources are not specialized and can be swapped for one another at no additional cost.
How do countries benefit from comparative advantages?
Comparative advantage can allow you to increase the profitability and efficiency of your business as you rely on the resources and lower cost of labor in other countries to reduce the cost of goods and materials.
How do you determine a country’s comparative advantage?
To calculate comparative advantage, find the opportunity cost of producing a barrel of oil in both countries. The country with the lowest opportunity cost has the comparative advantage.
What is comparative advantage in international trade?
Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. The theory of comparative advantage introduces opportunity cost as a factor of analysis in choosing between different production options.