I can send you the e-book link if necessary.

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Answered 4 days AfterAug 28, 2022

Answer To: I can send you the e-book link if necessary.

Komalavalli answered on Sep 02 2022
30 Votes
Q1)
Modern theory is concerned with opportunity cost, absolute, comparative advantage, labour value theory, trade specialization.
Q2)
Adam Smith defined comme
rce as the outcome of countries having an absolute advantage over one another in the production of certain products. Absolute advantage, according to Theory is concerned with the situation in which one country can manufacture one unit of a good with less labour than another. Mercantilism is a political and economic philosophy that advocates for government control of international commerce in order to gain wealth and national dominance. Traders and governments collaborate to decrease trade deficits and generate trade surpluses.
Q3)
Let us consider country A and B are producing cars and computers which is given in table below
     
    A
    B
    Cars
    10
    20
    computers
    30
    40
From this we can say that the both country has absolute disadvantage in producing computers.
     
    Opportunity cost of country A
    Opportunity cost of country B
    Cars
    3
    2
    computers
    0.33
    0.5
From above table we can say that the both countries has comparative advantage in producing computers
Q4)
Ricardo agrees with Smith that labour is the primary measure of value in exchange. Ricardo believes that the absolute theory of the value of labour is true if the relative values of distinct things are equal to the labour required to generate them. They both agreed that the supply side factor such as labour contributes towards trade but without a demand there will be non existence of trade, so demand side factor also have an equal contribution for...
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