Aalbania enjoy a comparative advantage, Managerial Economics


Refer to above figure. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it would choose to produce at which point in the diagram above? Assume the PA/PB at point a was equal to 1. Given this information, in which good (A or B) does Albania enjoy a comparative advantage?

Now that the Cold War is over, Albania is interested in obtaining economic welfare gains from trade. The relevant international relative price is PA/PB = 2. Albania would thus choose to produce at which point (a, b, or c)? Given this additional information, in which good does Albania enjoy a comparative advantage?


Posted Date: 3/15/2013 2:44:12 AM | Location : United States

Related Discussions:- Aalbania enjoy a comparative advantage, Assignment Help, Ask Question on Aalbania enjoy a comparative advantage, Get Answer, Expert's Help, Aalbania enjoy a comparative advantage Discussions

Write discussion on Aalbania enjoy a comparative advantage
Your posts are moderated
Related Questions
Transitional unemployment Transitional unemployment is that situation which prevails due to some temporary reasons.  The main reason for this type of unemployment are:

a. Explain why the demand for a particular brand is more elastic than the demand for all cigarettes. If Lucky Strike raised its price by 1% in 1918, was the price elast

In the national income analysis, investment refers to the value of than part of the aggregate output for any given time period which takes the form of construction of new structure

Q. Implications for the shape of cost function? A cost function is also a mathematical relationship, one which relates the expenses an organisation incurs on the quantity of ou

A promoter decides to rent an arena for concert. Arena seats 20,000. Rental fee is 10,000. (This is a fixed cost.) The arena owner gets concessions and parking and pays all other e

Meaning of Inflation There has been a proliferation of definitions of inflation. Many of these definitions, however, embody the description of the processes by which the underl

According to J.B. Clark's profits arises in a dynamic economy, not in a static one. A static economy is one in which there is absolute freedom of competition population and capital

Using the relationship among the price of a visit to a physiotherapist and the quantity of visits demanded, explain and distinguish between the direction, the slope, and the positi