Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 33: Q. 17. (page 804)

Are differences in geography behind the differences in absolute advantages?

Short Answer

Expert verified

Geography plays a most vital role in causing differences in absolute advantages.

Step by step solution

01

Step 1. Meaning of absolute advantage.

It is the ability of a party or individual, or firms, or country to produce a good or services more efficiently than its competitors.

02

Step 2. Role of geography in causing differences in absolute advantages.

Yes, geography does sometimes play a role in causing differences in absolute advantages. Absolute advantage in a term used when any country, in order to produce a good or services, makes use of fewer resources as compared to other countries. Thus, to a certain extent, greater natural resources or access to the seas can lead to absolute advantage for certain goods.

03

Step 3. Examples.

a) The United states has some of the richest farmland in the world, making it easier to grow corn and wheat.

b) Guatemala and Colombia have climates especially suited for growing coffee.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In Exercise 33.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?

Are the gains from international trade more likely to be relatively more important to large or small countries?

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain

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?

Do consumers benefit from intra-industry trade?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free