Question

When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming...

When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming Australia does not have the comparative advantage in the production of flowers, the opening up the flowers market in Australia to international trade will result in Australian consumers being worse off as the price of flowers will exceed $50. Correct this statement and provide for a brief example proving your case.
Just need to state that with no comparative advantage, international trade will lower prices for domestic consumers-explain with a brief example.
0 0
Add a comment Improve this question Transcribed image text
Answer #1

When there is absence of comparative advantage there is an absence of efficiency by any one player making all players in market better off and creates level playing field and thus induces competition which creates wafer thin matgins. As results of this internationalisation and foreign direct investment into closed economy the competition rises causing multiple price cuts and stiff margins and hence prices loosen and reduce for domestic consumers. Companies here compete with price cuts and price bundling reducing overallmarket prices and creating perfect competition and low entry barriers.

Add a comment
Know the answer?
Add Answer to:
When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming...

    When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming Australia does have the comparative advantage (CA) in the production of flowers, opening up the flowers market in Australia to international trade will result in Australian consumers being better off as the price of flowers will fall to below $50. Correct this statement and provide for a brief example proving your case. Just need to state that with CA, international trade will increase prices...

  • When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming...

    When Australia has a closed economy for flowers, a bouquet of flowers sells for $50. Assuming Australia does have the comparative advantage (CA) in the production of flowers, opening up the flowers market in Australia to international trade will result in Australian consumers being better off as the price of flowers will fall to below $50. Correct this statement and provide for a brief example proving your case. In answering this question, I will need to state that with a...

  • The U.S. government restricting the quantity of sugar imports into the country is an example of...

    The U.S. government restricting the quantity of sugar imports into the country is an example of a(n): trade settlement. trade quota. market hanger. embargo. The key industries argument for trade restrictions relies on the notion that: war may disrupt trade flows. some industries deserve protection because they provide positive spillover effects to the rest of the economy. products with inelastic supply are the major source for job creation. economies of scale are easier to achieve in exporting industries. Which of...

  • No need to explain in detail. I just want to check my answer. But please provide...

    No need to explain in detail. I just want to check my answer. But please provide me a formula. 1. The principle of comparative advantage asserts that a. not all countries can benefit from trade with other countries. b. the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good. c. countries can become better off by exporting goods, but they cannot become better off by importing goods. d....

  • match the argument with the response suggested by economi Match the argument with the response suggested...

    match the argument with the response suggested by economi Match the argument with the response suggested by economists. The jobs argument: Trade should be restricted A Trade restriction causes domestic prices to rise. The cost because it destroys jobs in industries that compete with imports to consumers exceeds the lost earnings of workers who lose their jobs. It would be cheaper to pay the workers The dumping argument When a producer sells a retaliation from trading partners will shrink employment...

  • 3. Which two sentences work together to express the topic of Paragraph 27 4. What is...

    3. Which two sentences work together to express the topic of Paragraph 27 4. What is the main idea of Paragraph 3? a. Citizens would benefit significantly from purchasing goods made in their country. b. It is advantageous for workers to adapt swiftly to dynamic economic conditions. c. Workers should change their circumstances as soon as the economy is hit with problems. d. Protectionist policies serve to help workers in certain industries keep their jobs. 5. What is the main...

  • Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between...

    Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between international trade and domestic trade More complex context More difficult and risky Higher management skills required 3. Basic concept s relating to international trade Visible trade & invisible trade Favorable trade & unfavorable trade General trade system & special trade system Volume of international trade & quantum of international trade Commodity composition of international trade Geographical composition of international trade Degree / ratio of...

  • 2006, interest rates increased from 5% to 7%, when this happens consumers are A. less likely...

    2006, interest rates increased from 5% to 7%, when this happens consumers are A. less likely to save, that is, sell a financial asset. B. more likely to save, that is, sell a financial asset. C. less likely to save, that is, purchase a financial asset. D. more likely to save, that is, purchase a financial asset. I. In 2. If commercial banks hold all their assets in the form of required reserves: A. only they will be able to...

  • Read the case study and answer the questions in the end. Towards a diversified knowledge economy...

    Read the case study and answer the questions in the end. Towards a diversified knowledge economy ECONOMIC DVERSIFICATION DRIVES GROWTH IN THE UAE UAE expects higher non oil growth in 2018 due to diversified economy 3.5 70 TOP COUNTRY Source www.putees.co sF KY ScroRs 100 MLLION 25 240 5 200 30 Diversification is important to promote economic development, to create job opportunities for a rapidly growing local workforce, but also to reduce or spread the risk of a high economic...

  • Paragraph One- Introduce your primary source "Chapter" (Economics of Public Issues, Miller et.al, 2014) claims....introduce the...

    Paragraph One- Introduce your primary source "Chapter" (Economics of Public Issues, Miller et.al, 2014) claims....introduce the main point of the chapter and explain: Why should we care? How will this topic, issue, problem affect us? Or more to the point, who will benefit from knowing more about this issue, situation, problem. Why is this an important topic, issue, or problem? Paragraph Two Introduce the main points of your research. Make sure you give credit to at least two other sources....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT