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Comparative Advantage:A theory of international trade which originated with David Ricardo in early 19th Century and is maintained (in revised form) within neoclassical economics. Theory holds that a national economy would specialize through international trade in those products that it produces relatively most efficiently. Even if it produces those products less efficiently (in absolute terms) than its trading partner, it may still prosper through foreign trade. The theory relies on several strong assumptions - including an absence of international capital mobility, a supply-constrained economy.
Two firms, A and B, are planning to bid for a contract of Motorway extension in Mauritius. Suppose: (1) firm B is a newly established company and has already incurred a st
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What is a negative externality?
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1. Through graphs describe the relationship between the price, P , and the average total cost, ATC , for a firm in perfect competition when it earns an economic profit; earns a n
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