Asked by Christian Mirakaj on Jun 14, 2024
Verified
Thailand has a comparative advantage in rice and an absolute advantage in both rice and cell phones. Indonesia has a comparative advantage in cell phones. According to this scenario
A) Indonesia should import both cell phones and rice.
B) Thailand should export both cell phones and rice.
C) Thailand should export rice and import cell phones.
D) Indonesia should export rice and import cell phones.
Comparative Advantage
The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, enabling beneficial trade.
Absolute Advantage
The capacity of a nation, individual, organization, or area to generate a product or offer a service at a cost per unit that is less than what any other party can produce that same good or service for.
- Analyze the consequences of trade and specialization on the production and consumption of goods between nations.
Verified Answer
Learning Objectives
- Analyze the consequences of trade and specialization on the production and consumption of goods between nations.
Related questions
Suppose That Greece and Portugal Are Both Engaged in the ...
Which of the Following Statements Is True ...
France and England Both Produce Wine and Cloth with Constant ...
Differences in Opportunity Cost Allow for Gains from Trade
(Table: Production Possibilities for the United States and Canada)Use Table ...