jake3266
12-12-04, 07:34 PM
I'm sorry to pollute this intellectual discussion with something as simple as a college level economics problem, but it is one I truly cannot grasp. Any help would be greatly appriciated. It is as follows:
A country will have a comparative advantage in the production of a good if the domestic quantity
a. supplied is positive at the world price.
b. demanded is positive at the world price.
c. supplied is greater than the domestic quantity demanded at the world price.
d. supplied is less than the domestic quantity demanded at the world price.
I am leaning towards answer a, since the domestic quantity would be positive at the world price line, indicating a comparartive advantage. I'm not positive of my reasoning, however, and was curious if anyone understood this principle better than I do. Thanks.
A country will have a comparative advantage in the production of a good if the domestic quantity
a. supplied is positive at the world price.
b. demanded is positive at the world price.
c. supplied is greater than the domestic quantity demanded at the world price.
d. supplied is less than the domestic quantity demanded at the world price.
I am leaning towards answer a, since the domestic quantity would be positive at the world price line, indicating a comparartive advantage. I'm not positive of my reasoning, however, and was curious if anyone understood this principle better than I do. Thanks.