cost of baby formula|baby formula any help?
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Question–: baby formula any help?
how much does 14 oz of baby formula cost a day?
The following is the answer: (Hint: The reader is not the correct identification.)
Answer by Allison
Depends on the form. Ready to feed is the most expensive at about .00 for 32 ounces so that would be a little less than .00 for 16 ounces. Liquid concentrate is about .50 for an 12 ounce can which makes 24 ounces when prepared correctly with 12 ounces of water so that would be a little more than .25 for 14 ounces.
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cost of baby formula
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Question–: Suppose that the comparative-cost ratios of two products- baby formula and tuna fish are as follows:?
in the hypothetical nations of Canswicki and Tunata:
Canswicki: 1 can baby formula= 2 cans tuna fish
Tunata: 1 can baby formula= 4 cans tuna fish.
In what product should each nation specialize? Explain why terms of trade of 1 can baby formula = 2.5 cans tuna fish would be acceptable to both nations?
The answer in the following: (Hint: The answer is not necessarily.)
Answer by simplicitus
Ah, but it wouldn’t.
In reality, either Canswicki or Tunata would be much more powerful than the other and would say to itself, why should I let them have so much profit when I could take it all?
This is why capitalism in general and globalization in particular is seen as so noxious. While in theory both sides benefit; in practice one side benefits much more than the other and the side that loses sees the situation as unfair.
In this case, the desired answer is that Canswicki has a competitive advantage in and so should produce baby formula while Tunata has a competitive advantage in and so should produce tuna.
http://en.wikipedia.org/wiki/Comparative_advantage
But, comparative advantage assumes limited resources that are already fully utilized (i.e. no unemployment), etc.
Furthermore, Canswicki has no absolute advantage while Tunata does,
http://www.bized.co.uk/virtual/dc/trade/theory/th2.htm
so Tunata is in a much stronger bargaining position.
So while both would be better off in an absolute sense as long as the trading ratio was between 1 can of baby formula to 2.1 can tuna and 1 can baby formula to 3.9 cans tuna (allowing 0.1 cans for the overhead of trading, etc.), that isn’t what will really happen.
What will really happen is that Tunata will produce both and Canswicki will produce only baby formula. Then Tunata will offer to sell tuna to Canswiki at 2.1 cans of tuna for 1 can of baby formula – just enough to make Canswicki feel they are better off than making their own tuna.
(And then, once Canswicki is locked in as a customer, Tunata will pull a Richard Nixon and stop shipments to Canswicki – as President Nixon stopped soybean shipments to Japan
http://books.google.com/books?id=kV_ina3A0AMC&pg=PA257&lpg=PA257&dq=nixon+soybean+shipments&source=web&ots=DQCFiERaYX&sig=PGXYbtuTO0VeCdd07GhEpwgnzaw&hl=en&sa=X&oi=book_result&resnum=4&ct=result
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