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Households, firms and government - Term Paper Example

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Absolute advantage is defined as the ability of a country, firm or individual to produce more of a good or a sevice than a competitor while using same resources. France has an absolute advantage over spain in producing both olives and wine.
Comparative advantage refers to the…
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Households, firms and government

Download file to see previous pages... Assuming 1 unit of wine can trade for 1 unit of cloth, it would be efficient for Spain to produce olives and France to produce wine. Spain has a comparative advantage in production of olive while France has a comparative advantage in producing wine. Spain can use 12 units to produce olives rather than 15 units in producing wine whereas France can produce wine at 25 units rather than Olive at 30 units.
c. C. make the following assumptions and construct a table showing the production (and therefore consumption) in each country and the world as a whole when neither country specializes or trades. Assume:
3. Ben’s Eggs sells chicken eggs in a perfectly competitive market. Ben’s Marginal Revenue is equal to £2 and it faces total costs that depend upon the number of turkeys produced. Total costs are given ...Download file to see next pagesRead More
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