The limits of the terms of trade are determined by the comparative cost conditions in each country before trade:
Less commerce occurs as a result of partial specialization and rising costs than when costs are constant. The cost advantage one country has over another serves as the foundation for commerce. This explains why some countries make things that they also import since they are able to do so for less money than their trading partners.
What is comparative cost ?
Comparative costs refers to comparing, using a comparative costs approach, the costs of signing into a privatized contract to the expenses of the state maintaining to provide the services that are the subject of the contract.
Therefore,
Less commerce occurs as a result of partial specialization and rising costs than when costs are constant. The cost advantage one country has over another serves as the foundation for commerce. This explains why some countries make things that they also import since they are able to do so for less money than their trading partners.
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Answer:
In economics, the marginal cost of production is the change in total production cost that comes from making or producing one additional unit. To calculate marginal cost, divide the change in production costs by the change in quantity.
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Answer:
(A) Decrease
(B) Increase
(C) Frictional
Explanation:
An decrease in the price of cotton will cause all the cotton producing firms to put Strategies in place that will help them to cut the costs of operations which will include the REDUCTION OF THE MANPOWER OR WORKFORCE.
When the price of raw materials or inputs used in the production processes of a given product reduces, IT WILL ENABLE THE COMPANY TO WANT TO INCREASE ITS PRODUCTION CAPACITY WHICH WILL ALSO INVOLVED AN INCREASE IN MANPOWER OR WORKFORCE.
Frictional Unemployment is a type of Unemployment caused by seasonal changes such as reduced demand, reduced price of products etc or people changing jobs due to certain factors.
