What is the theory of comparative advantage? What will be an ...

[rachel9]

What is the theory of comparative advantage?
 
  What will be an ideal response?

Question 2

Refer to Table 2-4. Assume Dina's Diner only produces sliders and hot wings. A combination of 20 sliders and 60 hot wings would appear
 
  A) along Dina's production possibilities frontier.
  B) inside Dina's production possibilities frontier.
  C) outside Dina's production possibilities frontier.
  D) at the vertical intercept of Dina's production possibilities frontier.

[bobsmith]

Answer to Question 1

The theory of comparative advantage was Ricardo's theory that specialization and free trade will benefit all trading partners (real wages will rise), even those that may be absolutely less efficient producers. Comparative advantage refers to instances where an individual or a company can produce something at lower opportunity cost than others can.

Answer to Question 2

B

[rachel9]

YES! Correct, THANKS for helping me on my review

[kusterl]

Thanks for the timely response, appreciate it