Log out Go to App
Go to App

Learning Materials

Features

Discover

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.

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

Under what conditions does comparative advantage

lead to gains from trade?

What factors does Paul Krugman identify that

supported expanding international trade in the 1800s?

Why might intra-industry trade seem surprising

from the point of view of comparative advantage?

How does comparative advantage lead to gains

from trade?

If trade increases world GDP by 1% per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint: To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lanka’s GDP.
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