• Study Resource
  • Explore
    • Arts & Humanities
    • Business
    • Engineering & Technology
    • Foreign Language
    • History
    • Math
    • Science
    • Social Science

    Top subcategories

    • Advanced Math
    • Algebra
    • Basic Math
    • Calculus
    • Geometry
    • Linear Algebra
    • Pre-Algebra
    • Pre-Calculus
    • Statistics And Probability
    • Trigonometry
    • other →

    Top subcategories

    • Astronomy
    • Astrophysics
    • Biology
    • Chemistry
    • Earth Science
    • Environmental Science
    • Health Science
    • Physics
    • other →

    Top subcategories

    • Anthropology
    • Law
    • Political Science
    • Psychology
    • Sociology
    • other →

    Top subcategories

    • Accounting
    • Economics
    • Finance
    • Management
    • other →

    Top subcategories

    • Aerospace Engineering
    • Bioengineering
    • Chemical Engineering
    • Civil Engineering
    • Computer Science
    • Electrical Engineering
    • Industrial Engineering
    • Mechanical Engineering
    • Web Design
    • other →

    Top subcategories

    • Architecture
    • Communications
    • English
    • Gender Studies
    • Music
    • Performing Arts
    • Philosophy
    • Religious Studies
    • Writing
    • other →

    Top subcategories

    • Ancient History
    • European History
    • US History
    • World History
    • other →

    Top subcategories

    • Croatian
    • Czech
    • Finnish
    • Greek
    • Hindi
    • Japanese
    • Korean
    • Persian
    • Swedish
    • Turkish
    • other →
 
Profile Documents Logout
Upload
APEC Wine Trade and Regulatory Coherence
APEC Wine Trade and Regulatory Coherence

... Involves the adjustment of two or more standards or procedures until they are the same. 3 ways to achieve harmonisation: Upward harmonisation – country with lower standards strengthens it to a higher level, or together draft a new standard at a higher level. Downward harmonisation – country with hig ...
Practice Midterm #1
Practice Midterm #1

... a. the responsiveness of quantity demanded to a change in quantity supplied b. the responsiveness of quantity demanded to a change in factor costs like wages c. the relationship between a good's current market price and its equilibrium price d. the responsiveness of quantity demanded to changes in p ...
Practice Midterm #1
Practice Midterm #1

... a. the responsiveness of quantity demanded to a change in quantity supplied b. the responsiveness of quantity demanded to a change in factor costs like wages c. the relationship between a good's current market price and its equilibrium price d. the responsiveness of quantity demanded to changes in p ...
I. The Basic Economic Concepts
I. The Basic Economic Concepts

... The shift of land from wheat to corn because of the ethanol initiative The demand for labor and capital and any owned input is derived from the demand for the goods and services they produce and the price you are willing to pay. The supply of capital depends on domestic savings and foreign investmen ...
Chapter 6
Chapter 6

... industries that are "threatened" by more efficient foreign producers, and have more political clout than the consumers who will eventually pay the costs 2. National Security - governments protect certain industries such as aerospace or advanced electronics because they are important for national sec ...
Lessons from the Specific Factors Model of International Trade
Lessons from the Specific Factors Model of International Trade

... provide insights into effects of international trade that the simpler Ricardian model overlooks. In particular, the Specific Factors model shows that, while trade does increase an economy’s consumption possibilities, it can cause some members of that economy to suffer losses compared to autarky. Alo ...
MicroPreS_Part 1
MicroPreS_Part 1

... consumers, workers, firms or managers. This study involves both the behavior of these economic agents on their own and the way their behavior interacts to form larger units, such as markets. ...
No Slide Title
No Slide Title

... These less efficient resources will be more expensive in that we will get less output per unit of input of these poorer resources. ...
(a) State clearly whether the following statement is TRUE
(a) State clearly whether the following statement is TRUE

... b) (i) The level of disposable income: The level of income is the basic determinant of how much households will consume. If disposable income increases, households’ consumption and/or saving increases. (ii) Stock of durable goods on hand: If the economy has enjoyed an extended period of prosperity, ...
The Cost-Minimizing Input Combinations - Abernathy
The Cost-Minimizing Input Combinations - Abernathy

...  When buyers tend to consume two goods together, the goods are known as complements. ...
United States Dumping on World Agricultural Markets
United States Dumping on World Agricultural Markets

... Dumping hurts farmers around the world: If farmers can’t get a price that covers expenses then it’s difficult to stay in business. Farmers in other countries are hurt because dumped exports push them out of local markets and eliminate their ability to export. Poor countries facing hunger are particu ...
spring 2000
spring 2000

... however, true that certain talented people have an absolute advantage in everything they do. They may be able to do everything faster or at lower cost that another person. However, even the less talented person will have a lower opportunity cost of production in one area. b. (15 points) “If a certai ...
file
file

... quantity demanded to a change in price. Ex. Drug addicts want to get “high” no matter how much the price increases. Certain quantities of life saving drugs are needed no matter what the cost=inelastic. If a ...
Globalisation and Geography by Crafts and Venables
Globalisation and Geography by Crafts and Venables

... • Monopolistic competition is when firms compete with each other indirectly since each firm produces a different variety of the good, say cars, electric motors, chemicals, etc. • Each firm takes prices of other firms as given and thus views itself as having a monopoly on the “residual demand”, i.e. ...
Lecture 1: An Introduction to Economics
Lecture 1: An Introduction to Economics

... – The cost of producing one more item (marginal cost) – Don’t focus on average costs or returns or sunk costs ...
Answer - CSUNEcon.com
Answer - CSUNEcon.com

... point B where they are producing the same output with a lower total cost or output maximize by moving to C where they are producing more output with the same total cost. In either case, the capital/labor ratio will decrease ...
mcl_mankiw_intro_micro_chapter_18_fall_2012
mcl_mankiw_intro_micro_chapter_18_fall_2012

... • This is the neoclassical theory of income distribution, in which factor prices are determined by supply and demand and that each factor is paid his value of marginal product. • The three factors of production-labor, land and capital. • Factor demand is derived from the its supply of output. • Comp ...
PS 1 - Suffolk University
PS 1 - Suffolk University

... In the 1970s, there was serious concern about the instability of commodity prices. One of the planks of the then-fashionable New International Economic Order was that efforts should be made to stabilize the prices of goods. Consider the following scheme: When the price of rubber is low, an internati ...
The Gains from International Trade
The Gains from International Trade

... 3,000 bushels for each car)—Mobilia imports and Farmland exports 12 billion bushels of grain. Trade is balanced. For each country, the value of exports equals the value of imports—4 million cars are worth the same as 12 billion bushels of grain. ...
Il est possible, en s`appuyant sur le récent rapport Sutherland au
Il est possible, en s`appuyant sur le récent rapport Sutherland au

... It is in fact too easy to wield the WTO like a scarecrow to avoid working on the necessary changes in the economies. On the contrary, each country needs to appreciate the benefits they can reap from a balanced system and therefore engage in the necessary efforts. I know the numerous demands that dev ...
WHY ARE THERE RICH AND POOR COUNTRIES? SYMMETRY BREAKING A Note
WHY ARE THERE RICH AND POOR COUNTRIES? SYMMETRY BREAKING A Note

... We follow Matsuyama (1996) and introduce three consumption goods, goods 1 and 2 are tradeable, and good 3 is non tradeable. The world economy consists of a continuum of identical small countries. Each country occupying ` units of land and producing its own non tradeable good. We consider first the p ...
Study guide for Nov. midterm and Exam
Study guide for Nov. midterm and Exam

... from their labour, capital and land. Other nations are much less productive, and produce smaller quantities of outputs from their labour, capital and land. Can both more productive and less productive nations benefit from free trade? Explain your answer. 2. Assume that in Thailand more land, labour ...
Fundamentals - pm
Fundamentals - pm

... total output, and therefore increase total wealth? ...
Thomas Maltus (1766-1834)
Thomas Maltus (1766-1834)

... => subsistence existence (eventually) for the mass of the population - population “oscillates” moving in “retrograde and progressive movements” - excessive population relative to subsistence lowers the wage rate (since population is large relative to demand), causing labourers to work harder, and in ...
Major Field Test in Economics Sample Questions
Major Field Test in Economics Sample Questions

... theme of Adam Smith's Wealth of Nations? (A) Capitalist economies are unstable. (B) The economy's money supply should be increased at a constant annual rate. (C) Government planning is necessary to achieve economic efficiency. (D) The private sector's expectations regarding government macroeconomic ...
< 1 ... 56 57 58 59 60 61 62 63 64 ... 81 >

Comparative advantage



The theory of comparative advantage is an economic theory about the work gains from trade for individuals, firms, or nations that arise from differences in their factor endowments or technological progress. In an economic model, an agent has a comparative advantage over another in producing a particular good if he can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. One does not compare the monetary costs of production or even the resource costs (labor needed per unit of output) of production. Instead, one must compare the opportunity costs of producing goods across countries. The closely related law or principle of comparative advantage holds that under free trade, an agent will produce more of and consume less of a good for which he has a comparative advantage.David Ricardo developed the classical theory of comparative advantage in 1817 to explain why countries engage in international trade even when one country's workers are more efficient at producing every single good than workers in other countries. He demonstrated that if two countries capable of producing two commodities engage in the free market, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage while importing the other good, provided that there exist differences in labor productivity between both countries. Widely regarded as one of the most powerful yet counter-intuitive insights in economics, Ricardo's theory implies that comparative advantage rather than absolute advantage is responsible for much of international trade.
  • studyres.com © 2025
  • DMCA
  • Privacy
  • Terms
  • Report