Final Exam Practice Questions Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. Also assume that Germany has an absolute advantage in both fish and cars. If these two countries specialize and trade so as to maximize the benefits of specialization and trade‚ then |a. |the two countries’ combined output of both goods will be higher than
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the idea of comparative advantage provide a good explanation of current patterns of international trade? For the last two centuries the international trade evolved a lot and many economists tried to explain it. One of the first theories that attempted to explain the international trade pattern was the Absolute advantage theory. A.Smith was a great economist; he is the one who created this theory. For A. Smith countries should specialize in products in which they have an absolute advantage. It was a
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of comparative advantage: The theory provides a basis for explaining and justifying international trade in a model world assumed to enjoy free trade‚ perfect competition‚ no uncertainty‚ costless information‚ and no government interference. 5. Limitations of comparative advantage: a. Countries do not appear to specialize only on those products that could be most efficiently produced by that country’s particular factors of production. b. Governments interfere with comparative advantage for
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Theory of Comparative Advantage Historically‚ nations have been trading with each other for hundreds of years for profit or because they do not have enough resources (land‚ labor and capital) to satisfy all the needs of consumers. For example‚ Japan has a highly skilled labor force that use technologically advanced equipment to produce cars and electrical equipment; however it does not have its own oil fields. Saudi Arabia has large supplies of oil‚ but lacks the built capital to produce cars
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Do 1 Life Before and After the Fall of Communism in the Czech Republic Recently the senate and county elections in the Czech Republic confirmed that the preference of Czech voters is shifting to the left‚ what’s more the Communist Party of Bohemia and Moravia got the second highest number of votes. The results are disturbing‚ because the last time Communists won the polls‚ the Czechs ended up being oppressed for over 40 years until they managed to overthrow the government. Now it seems that
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Fantasy Football In the “Fantasy Football” article Isaac Morehouse explains opportunity cost and comparative advantage by providing an illustration into everyday life. He provides the example of the fantasy football commissioner’s veto to economics in everyday life. He explain how sometimes you need to think “outside of the box” if you will. I would assign this essay a solid B. I feel this article deserves a B because it is a good example for me to relate to however‚ if you don’t understand anything
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Log book table of contents Kelly Villanueva Page 1 Table of Contents Page 2 Runway or Another Page 3 Torn but Tempted Page 4 An appetite for Junk Page 5 Reverse-flow Woes Page 6 Sour Fruit Page 7 Debtors’ Prison Page 8 Fawty Europe Page 9 When Education Dries Up Page 10 Sense Prevails Page 11-Planning the Next Bounceback Page 12-Comuputer Says No Page 13-A reasonable Supply Page 14-The Silicon Valley Letter Page 15- In Detroit‚ the Long Wait for A Woman CEO Is Over Page 16-17
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The Absolute Advantage concept is generally attributed to Adam Smith for his 1776 publication An Inquiry into the Nature and Causes of the Wealth of Nations in which he countered mercantilist ideas. Adam Smith argued that it was impossible for all nations to become rich at the same time by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their
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Cultural Analysis – Czech Republic Missouri University of Science and Technology ` table of contents table of contents ii 1.0 Czech vs u.s. Culture – hofstede’s model 3 2.0 Czech business culture – trompenaaris classificaion 7 3.0 U.S. Business culture change needed 7 4.0 bibliography 9 1.0 Czech vs u.s. Culture – hofstede’s model The Czech Republic has its roots as a former communist state known as Czechoslovakia. The fall of communism and the transformation to a democratic
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Opportunity Costs‚ Absolute Advantage and Comparative Advantage Abstract This work defines and illustrates examples of opportunity cost. It also defines and compares comparative and absolute advantage. Then‚ the work extends the narrative to compare these terms in today’s society. Opportunity Costs‚ Absolute Advantage and Comparative Advantage Example 1: | Potatoes | Chickens | Michelle | 200 | 50 | James | 80 | 40 | * What is Michelle’s opportunity cost of producing potatoes
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