Ask Question
6 October, 17:54

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that:

1. if Canada were to allow trade, it would export hockey sticks.

2. Canada has an absolute advantage, relative to other countries, in producing hockey sticks

3. Canada has a comparative advantage, relative to other countries, in producing baseball bats.

4. All of the above are correct.

+2
Answers (1)
  1. 6 October, 18:01
    0
    3. Canada has a comparative advantage, relative to other countries, in producing baseball bats.

    Explanation:

    Comparative advantage is the ability of the country to produce good or services for a lower opportunity costs for example the oil producing countries have comparative advantage in chemicals.

    Options 1,2 and 4 are incorrect.

    Absolute advantage is the ability of a country or region to produce greater quantity of units with the same no of inputs in the same time.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers