Economics Of Trade

Question 1

What is meant by Absolute Advantage?

Answer 1

The concept of absolute advantage is that a country will tend to export those goods which it can more cheaply.
A presumption is made that such a cost advantage arises because of superior the productivity of resources.

Question 2

What are Shadow Prices?

Answer 2

Shadow prices reflect the opportunity costs of the resources

Question 3

What is the Relevance Of The Macroeconomic Factors On Australian Agriculture?

Answer 3

International trade depend on macroeconomic factors related to the monetary aspects such as exchange rates (i.e. AUD value relative to other currencies) because nations require the exchange of one nation’s currency for that another.
Australia’s exports of goods, services and financial obligations, give rise to a demand and also a supply of the Australian dollar in the foreign exchange market.

Question 4

Key Terms

Answer 4

•Agriproduct trade from Australia •Commodities exported (examples?)
•Why Australia export agriproduct (reasons?) •World major agriproduct exporters?
•World major agriproduct importers? •Absolute advantage (define)
•Comparative advantage (explain) •Production possibilities
•Consumption possibilities
Ga•Agriproduct trade from Australia •Commodities exported (examples?)
•Why Australia export agriproduct (reasons?) •World major agriproduct exporters?
•World major agriproduct importers? •Absolute advantage (define)
•Comparative advantage (explain) •Production possibilities
•Consumption possibilities