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Author Question: How can a nation and its producers determine whether or not it has a comparative advantage in ... (Read 48 times)

swpotter12

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on: Jun 29, 2018
How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service?
 
  What will be an ideal response?

Question 2

What are the conditions that characterize the sellers' side in a perfectly competitive market?
 
  What will be an ideal response?
Foundations of Microeconomics ¦ Bade, Parkin ¦ 8th Edition
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fromAlphatoOmega22

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Whether a nation has a comparative advantage in the production of a particular good or service can be determined by comparing the price the good or service sells for domestically to the world price of the same good or service. If the domestic price is less than the world, the nation has a comparative advantage in the production of that good or service. If the domestic price exceeds the world price, the nation does not have a comparative advantage in the production of that good or service.

Answer to Question 2

Three conditions characterize the sellers' side in a perfectly competitive market. These are:
a) A large number of sellers participate in the market and no single seller has a large market share.
b) All sellers in the market produce identical goods.
c) There is free entry and exit of sellers in the market.


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