What is the difference between absolute advantage and comparative advantage with examples?
The Absolute Advantage is the country’s inherent ability to produce specific goods efficiently and effectively at a relatively lower marginal cost. However, Comparative Advantage refers to the country’s capability to produce the specific good at lower marginal cost and opportunity cost.
What is an example of comparative advantage?
Comparative advantage is what you do best while also giving up the least. For example, if you’re a great plumber and a great babysitter, your comparative advantage is plumbing. That’s because you’ll make more money as a plumber.
What are the major differences between the theories of absolute advantage and comparative advantage?
A country has an absolute advantage if it produces a large number of goods with the same resources as provided to another country whereas the country has a comparative advantage if the Country can produce a particular product with better quality at a cheaper price than another country.
What is the importance of comparative advantage?
The benefit of comparative advantage is the ability to produce a good or service for a lower opportunity cost. A comparative advantage gives companies the ability to sell goods and services at prices that are lower than their competitors, gaining stronger sales margins and greater profitability.
Which country has the comparative advantage in producing dates?
Which country has the COMPARATIVE advantage in producing DATES? Italy and Libya produce grain and dates.
Which example is a quota?
A quota is a type of trade restriction where a government imposes a limit on the number or the value of a product that another country can import. For example, a government may place a quota limiting a neighboring nation to importing no more than 10 tons of grain.
What is a voluntary export restraint quizlet?
Terms in this set (5) i) Definition: a voluntary export restraint occurs when an exporting country or companies in an exporting country agree to limit how many of a product that they will export to another country.
Which of the following is the best definition of a quota?
A quota is a government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period. Countries use quotas in international trade to help regulate the volume of trade between them and other countries.