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Chapter 19: Q 17. (page 462)

Are differences in geography behind the

differences in absolute advantages?

Short Answer

Expert verified

It depends on various factors whether differences in geography behind the differences in absolute advantages.

Step by step solution

01

Step 1. Definition

The ability of individual, firm, region, or country to produce a greater quantity of a good or service using the same quantity of inputs or to produce the same quantity of a good or service using a lesser quantity of inputs can be referred to as absolute advantage.

02

Step 2. Explanation

Yes, sometimes geography plays a role in causing differences in absolute advantages but it is not the only factor.

Take an example, as the amount of effort required to mine coal depends to a great extent on where coal deposits are located in abundance, which depends on geography. But smartphones stores are located everywhere, this is because the productivity of smartphones depends on things other than geography.

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Most popular questions from this chapter

Why might a low-income country put up barriers

to trade, such as tariffs on imports?

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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