If the United States has an absolute advantage relative to Mexico in all products, then

a. Neither nation can benefit from trade.

b. Mexico can benefit from trade but the United States cannot.

c. Mexico will not have a comparative advantage in any good.

d. Both nations can still benefit from trade.

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mauveporpoise966Lv1

2 Jun 2021

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Explain how the United States, being a large economy with an abundance of natural resources, labor, and capital, can benefit by not being in autarky. It was shown in the video that the United States had the comparative advantage in burgers. Using the table below, show and explain how Mexico has the comparative advantage in phones. From your answer in the previous question, what is the opportunity cost of burgers for the United States, i.e. how many burgers must the United States give up to produce one phone? What would be an agreeable terms of trade for 1 phone? At the end of the video, a supply and demand graph of the phone market for both countries was shown. Explain why Mexico exported phones to the United States. Suppose, the market for burgers was shown rather than the market for phones in the supply and demand graphs. For the United States to export burgers and Mexico to import burgers, what would world price need to be. in each country, relative to the domestic price? Lastly, explain what a tariff is and the effect it can have on burger imports for Mexico.

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below.

United States

Mexico

Hamburgersâ (in tons)	Tacosâ (in tons)	Hamburgersâ (in tons)	Tacosâ (in tons)
0	3636	0	3030
2020	2424	44	2020
4040	1212	88	1010
6060	0	1212	0

Which country has an absolute advantage in producingâ tacos?ââ

The United States

Which country has a comparative advantage in producingâ tacos?ââ

Mexico

Suppose the United States is currently producing

4040

tons of hamburgers and

1212

tons of tacos and Mexico is currently producing

tons of hamburgers and

1010

tons of tacos. If the United States and Mexico each specialize in producing only one goodâ (the good for which each has a comparativeâ advantage), then a total of

nothing

additionalâ ton(s) of hamburgers can be produced for the two countries combined â(enter a numeric response using anâ integer

salmonhornet160

215. Economists examine pollution from the perspective of the:
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C) desires of government bureaucrats.
D) intent of business firms in the maximization of profits.

212. Free trade is beneficial because it:
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C) it will not find trade beneficial because other countries won't have a comparative advantage in other goods.
D) it must also have an absolute advantage in the good.

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A) Nations have generally moved toward freer international trade policies over the past few decades.
B) Nations all over the world have recently raised trade barriers.
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D) NAFTA lowered trade barriers between the United States and Mexico but raised them between the United States and Canada.