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Material Type: Exam; Class: Prin of Microeconomics; Subject: Economics; University: Shepherd University; Term: Unknown 1989;
Typology: Exams
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Use the graph of the oligopoly firm below to help you answer questions 4 and 5. P MC 4 P 1 A MC 3 MC 2 MC 1 D = P MR Q 1 Q
c. Which country has comparative advantage in the production of TVs? Of bicycles? Explain your reasoning. d. If each country decides to specialize in the production of the good for which it has comparative advantage and trade freely for the other good, which of the following could be the international (or world) terms of trade : i. 1 TV for 1 bicycle -or- ii. 1 TV for 6 bicycles? Explain your reasoning fully.