--%>

Problem regarding Comparative advantage

Assume that El Salvador can generate coffee at lower opportunity costs than Spain, whereas Spain can generate olive oil at lower opportunity costs than El Salvador. The citizens of both countries can potentially profit from international trade since of the efficiency related with: (1) Positive economics. (2) Comparative advantage. (3) The circular flow model. (4) Diminishing returns. (5) Normative economics.

Can someone please help me in finding out the right answer of the above question.

   Related Questions in International Economics

  • Q : Lone mill mine What challenges are

    What challenges are facing lone mill mine and what strategies can be used

  • Q : Must home production be defended to

    Examining US–Canadian imports-exports and analyzing a call to protect the US lumber business.

  • Q : What is managed floating exchange rate

    Managed floating exchange rate: This is a system in which the central bank or Government permits the exchange rate to identify market forces although they take decisions to intervene whenever they feel it suitable.

  • Q : Autonomous or accommodating carry

    Which transactions- autonomous or accommodating carry balance in BOP? Answer: Accommodating transactions carry balance in the BOP or balance of payment.

  • Q : Exchange rates-a question of demand and

    ‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’

  • Q : Problem on International trade economy

    If the Chinese economy could create all goods with fewer resources per unit than are needed in US, the citizens of China would: (i) Encompass a comparative advantage in the whole thing. (ii) Be self-sufficient since there would be no potential profits from trade. (iii

  • Q : Economic environment in Australia and

    Explain the Economic environment in Australia and Internationally and their factors which affect them?

  • Q : Describe the meaning of deficit in BOP

    Describe the meaning of deficit in BOP: Whenever autonomous foreign exchange payments surpass autonomous foreign exchange receipts, the difference is termed as balance of payments deficit.

  • Q : Problem related to direct foreign

    China is a huge manufacturer of technology of telephone devices. It has lately become a member of W.T.O. that means it can sell its products in other member countries such as India. Assume that it does export a big number of telephone instruments to India:

  • Q : Define foreign exchange Define foreign

    Define foreign exchange: It is the currency other than domestic currency.