If nations specialize according to their comparative advantage and engage in international trade with each other, each nation can aproduce outside its production possibilities curve bconsume outside its production possibilities curve cproduce more of all goods dshift its production possibilities curve to the right ebecome more self-sufficient

How do countries develop a comparative advantage over their trading partners?A.By producing more essential goods than other countriesB.By having lower opportunity costs for producing certain goodsC.By lowering the trade deficits they have with their neighborsD.By reducing their reliance on foreign trade for essential goods

_______ holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

Countries often benefit from specializing in a certain product because specialization:A.allows them to focus on making one product as efficiently as possible.B.decreases the price of natural resources needed to make a product.C.prevents other countries from trying to make similar products.D.ensures that they will not have to rely on trade for essential products.

Required informationSkip to questionIndia's Comparative Advantage This activity is important because many managers need to consider international trade and its impact on their business. Nations and businesses engage in international trade to obtain raw materials and goods that are otherwise unavailable to them or available elsewhere at a lower price than that at which they themselves can produce. A nation, or individuals and organizations from a nation, sells surplus materials and goods to acquire funds to buy goods, services, and ideas that its people need. Which goods and services a nation sells depends on what resources it has available. The goal of this exercise is to demonstrate your understanding of international trade as it relates to one major country, India. Read the case below and answer the questions that follow. Part I: India, with a population of 1.35 billion, is the fastest growing population in the world and the second largest population in the world (China is first). Even though India’s Gross Domestic Product (GDP) ranking puts it outside of the Top 5 worldwide (behind countries like the United States, China, Japan, Germany, and the United Kingdom), the growth rate of India’s GDP averages above 6%, surpassing these other countries. Still, the average salary in India is less than $2000 a year, and India’s average annual income is below more than 50 other countries. In addition, there is stark contrast in India between affluent cities and impoverished areas, with the richest 10 percent of India controlling 80 percent of the nation’s wealth. In contrast, about 60 percent of India’s population lives on about $3 per day, living in villages and unable to afford luxuries like refrigeration and running water. Part II: India's road to success has been and will be extremely different from the organized route that China has taken to expand its economy. China’s all-powerful government is responsible for the country’s growth, while India has a large number of entrepreneurs who are determined and willing to do what it takes to make money. Indian companies are growing at remarkable annual rates of 15 to 25 percent. However, Indian consumers are also contributing to this growth. Personal consumption accounts for about 60 percent of India’s gross domestic product, less than 10 percent behind the United States, which has one of the highest personal consumption rates. Part III: American companies have moved their operations to India to take advantage of inexpensive labor, but India boasts a growing number of its own successful blue-chip companies, such as Infosys and Tata Consultancy. Infosys, for example, designs and maintains software for almost the majority of Fortune 500 companies. India’s manufacturing sector has also become a global force. Once sluggish and inefficient, the manufacturing industry has benefited from recent economic reforms as well as a plentiful supply of engineering talent and inexpensive labor. Above all, what appears to be driving India's growth is an enthusiasm to succeed. This enthusiasm may be attributed to India’s emergence as an independent society ready for change—and what a change! Which of the following best represents a training that would need to occur in order to help someone doing business in India overcome cultural barriers?Multiple Choicea training on gender roles and taboosa debriefing on trade and employment lawa training on financial exchangea training on legal issues surrounding selection and assessmenta training on tariffs for exporting

A product is produced in a monopolistically competitive industry with scale economies. If thisindustry exists in two countries, and these two countries engage in trade with each other, then wewould expectA) the country with a relative abundance of the factor of production in which production of theproduct is intensive will export this product.B) the countries will trade only with other nations they are not in competition with.C) the country in which the price of the product is lower will export the product.D) neither country will export this product since there is no comparative advantage.E) each country will export different varieties of the product to the other.