Answer:
D. -4/5
Explanation:
Given that
Wage rate = $20 per hour
Cost of capital = $25 per hour
Recall that,
Slope of isocost = -(w/r)
Where,
W = wage rate
r = rental cost of capital.
Thus,
Slope of isocost curve
= -(20/25)
= -0.8 or -4/5
Note that, the negative of the ratio is the price of the two inputs. Also isocost is a line showing the various combinations of inputs which cost the same amount.
Even though the United States has an absolute advantage in producing both refrigerators and shoes, it makes economic sense for it to specialize in the good for which it has a comparative advantage. The United States will export refrigerators and in return import shoes.
<h3>Do all countries have an absolute advantage in production?</h3>
In the production of at least one good or service, almost every nation enjoys an absolute competitive advantage. The key to absolute advantage is low-cost production. For instance, because they can benefit from low labor costs, China and other Asian nations are known to have a distinct advantage in the manufacturing sector.
<h3>What determines a nation's choice to specialize in a particular good?</h3>
When resources are scarce, a country's decision to focus on producing a specific good is also heavily influenced by its comparative advantage. Comparative advantage is based on the idea of opportunity cost, whereas absolute advantage refers to the superior production capabilities of one nation over another.
Does Japan have an absolute advantage in the auto industry?
Japan is said to have a clear advantage in the auto industry if it can produce cars just as well as the United States, but more quickly and with higher quality. The kinds of goods a nation decides to produce are greatly influenced by its absolute advantage or disadvantage in a given industry.
Learn more about U.S. auto industry:
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Answer:
The correct answer is letter "C": the Macro Islands have a comparative advantage in producing fishing boats, and the Micro Islands have a comparative advantage in producing guava jelly.
Explanation:
Comparative advantage is an advantage an individual, organization or country has to use <em>opportunity costs</em> in their production compared to their competitors. The scenario described above does not imply that the individual, organization or country has an absolute advantage.
In the example proposed:
- Comparative advantage of Macro islands in fishing boats =
- Comparative advantage of Micro islands in fishing boats =
- Comparative advantage of Macro islands in jars =
- Comparative advantage of Micro islands in jars =
Thus, <em>the Macro Islands have a comparative advantage in producing fishing boats, and the Micro Islands have a comparative advantage in producing guava jelly.</em>
Answer:
Explanation:
For answer , see the attached file.
Answer:
They may put a firm at a competitive advantage to indigenous competitors
Explanation:
- A trade barrier is a restriction on international trade of import and exports of the products are also called as tariff barriers on imported goods and they include quotas, embargoes, they discourage the free trade and keep the principle of the comparative advantage.
- The main arguments that they help protect the domestic companies, and industries, and the workers.
