Intro To Business Student: ___________________________________________________________________________ 1. Any activity which seeks to earn a profit by providing a good or service is known as a(n): A. industry B. corporation C. business D. service 2. __________ is the amount a business earns over and above what it spends for salaries and other expenses. A. Profit B. Revenue C. Interest D. Dividends 3. A business incurs a ___________ if its costs and expenses exceed its revenues
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enterprise to reach out and obtain resources from outside of the firm to pursue the firm’s vision and create the value THE THEORY OF COMPARATIVE ADVANTAGE Each country specializing in products for which it possessed absolute advantage and produce more for less and exchange products for the items they needed Governments interfere with comparative advantage for a variety of economic and political reasons‚ such as to achieve full employment‚ economic development‚ national self-sufficiency in
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regions‚ to experience with various products that cannot be produced in each of their countries or regions. Trading goods and services are exchanged at the place called markets. There are two laws of trade called the law of absolute advantage and law of comparative advantage. For Australia‚ we take about 1% of the trade in global as Australian economy relies on trading. When people say ‘trade’ with others‚ it simply applies to any business of selling and buying goods through using monetary value
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the opportunity cost of one unit of beef is 4 chips; the opportunity cost of one chip is 1/4 unit of beef. b. In which commodity does the United States have a comparative cost advantage? What about Germany? The United States has a comparative cost advantage in beef with respect to Germany‚ while Germany has a comparative cost advantage in computer chips. c. What is the range for mutually beneficial trade between the United States and Germany for each computer chip traded? The range for mutually
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1. When comparing the composition of world trade in the early 20th century to the early 21st century‚ we find major compositional changes. These include a relative decline in trade in agricultural and primary-products (including raw materials). How would you explain this in terms of broad historical developments during this period? The typical composition of world production during this period experienced major changes. Focusing on today’s major industrial countries the industrial-employment composition
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Economics 339‚ A01‚ CRN 12913 Assignment 2 Dr. L. Welling November 16‚ 2012 Assignments are due at the beginning of class on the due date. Remember to use at least ½ page for each diagram. 1. (25 marks) Juanita derives utility from both leisure (L) and food (G). She has 18 hours per day which she can divide between leisure and preparing meals (H). Her ability to prepare meals is described by the function G=g(H;X)‚ and displays positive but diminishing marginal productivity of H. a) (4 marks) In a
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because of the variations in productive factors in different countries. The variations of productive factors cause differences in price in different countries and the price differences are the main cause of international trade. There are numerous advantages of international trade accruing to all the participants of such trade. Benefits of International Trade Efficient use of productive factors: One of the biggest benefits of international
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prostitution and even murder were common. Comparative advantage – brownconsultancy.com International Trade takes place because of the variations in productive factors in different countries. The variations of productive factors cause differences in price in different countries and the price differences are the main cause of international trade. There are numerous advantages of international trade accruing to all the participants of such trade. A few of such advantages are mentioned below: Efficient use
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from Fremont). 3.Use the theory of comparative advantage to explain the way in which Logitech has configured its global operation. Why does the company manufacture in China and Taiwan‚ undertake basic R&D in California and Switzerland‚ design products in Ireland‚ and coordinate marketing and operations from California? Comparative advantage‚ as proposed by Ricardo‚ says that it is beneficial for nations to involve in trade even when there is absolute advantage for them to produce all the goods
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html. Last accessed 3rd Nov 2014. Economics Essay Competition Page 2 courage firms to become more efficient and competitive‚ and perhaps even expose producers to newer technologies and result in greater production. " The theory of “absolute advantage” proffered by Adam Smith states that a country may not have to trade with others if it can produce everything it needs itself. After all‚ why should it trade? However‚ David Ricardo‚ a Classical economist‚ had a differing perspective. His idea of
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