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What is an absolute advantage




1. International Trade (15);A. What is an absolute advantage? What is a comparative advantage? (5);B. Give an example where you have an absolute but not a comparative advantage.(5);C. Why should we specialize and trade? (5);2.;Monopoly vs. Perfect Competition (PC) (40);A. Graph a comparison of the short-run and long-run profits, price, and quantity of a;Monopoly and a PC firm. (20);B. Which type of market structure generates greater profits? Why? (5);C. Give 5 Characteristics of a PC firm and monopoly. What are the implications of;each of these characteristics. (10);D. Give a real life example of a monopoly and a PC firm. (5);2. Oligopoly (25);A. What is an oligopoly? Give an example. (5);B. Give some of the characteristics of an oligopoly. (5);C. Assuming that there are only 2 airline companies in the world, Delta and US Airways, what is the ((Nash) Equilibrium) or price that each company in the follow ing matrix will charge? At that price, what profits do each company get? Note;that the first number listed in bold is the profit for Delta and the second number;listed that is italicized is the profit for US Airways. (10);US Airways;$500;$500;$17000;Delta;$400;$14000;$17000;$400;$19000;$20000;$16000;$14000;$350;$350;$10000;$21,000;$13000;$16000;$17000;$11000;$23000;$19000;$14000;$13000;$15000;D. Is there a way that Delta and US Airways could collude to increase profits? What;might prohibit this collusion? (5);3. Monopolistic Competitive (15);A. Graph the long-run profit of a monopolistically competitive firm. (5);B. Do Monopolistically competitive firms generate a long-run profit? (5);C. Why is a monopolistic competition said to be inefficient? (5)


Paper#30628 | Written in 18-Jul-2015

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