The choice of country a to purchase wheat from country b is supported by Ricardo's theory of comparative advantage, which is the theory of international commerce.
<h3>What is the trade theory of Ricardo?</h3>
Three premises underlie the Ricardian theory of international trade: labor productivities are fixed, there is no cross-border movement of the production factors, and labor is the only production factor. Only the first of these presumptions is acknowledged by Ricardo himself.
According to Ricardo's well-known theory of comparative advantage, countries can gain a competitive advantage in international trade by focusing on producing goods with the lowest opportunity costs compared to those of other countries.
<h3>What can we infer about the advantages of free trade from Ricardo's theory of comparative advantage?</h3>
The foundation of international trade is comparative advantage, which also serves as the basis for the positive economic effects of free trade on nations. According to the comparative advantage concept, trade can still be advantageous to both trading partners even when one country has a clear advantage in producing goods.
Learn more about Ricardo's theory of comparative advantage: brainly.com/question/14015888
#SPJ4
Answer:
Gross Earnings $760
Net Earnings $606.86.
Explanation:
Beth's regular hourly wage is 40 hours at the rate of $16 per hour.
40 x 16 = $640
Overtime hourly wage is additional hours after the normal 40 hours at the rate of $24.
5 x 24 = $120
Gross earnings is calculated by adding both the above amounts.
640 + 120 = $760
Her employer will charge FICA rate of 7.65% for the amount she earns (Gross Earnings).
760 x 7.65% = 58.14
Net Earnings will be Gross Earnings less FICA and federal income tax $95.
760 - 58.14 - 95 = 606.86
Hence, Beth's Gross Earnings are $760 and Net Earnings are $606.86.
Honesty and working hard.
