Chapter 19: Q 24. (page 462)
Do consumers benefit from intra-industry trade?
Yes, the consumers will benefit from intra- industry trade.
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What is absolute advantage? What is comparative advantage?
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef in Brazil? What is the opportunity cost of producing one pound of beef in the United States?
Why might a low-income country put up barriers
to trade, such as tariffs on imports?
In Exercise 19.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?
You just got a job in Washington, D.C. You move
into an apartment with some acquaintances. All your roommates, however, are slackers and do not clean up after themselves. You, on the other hand, can clean faster than each of them. You determine that you are 70% faster at dishes and 10% faster with vacuuming. All of these tasks have to be done daily. Which jobs should you assign to your roommates to get the most free time overall? Assume you have the same number of hours to
devote to cleaning. Now, since you are faster, you seem to get done quicker than your roommate. What sorts of problems may this create? Can you imagine a trade-related analogy to this problem?
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