International Trade_Comparative Advantage

The producer that can produce the most output OR requires the least amount of inputs (resources)

• Comparative Advantage

• Trade Offs

• Absolute Advantage

• Opportunity Cost

The producer with the lowest opportunity cost.

• Comparative Advantage

• Trade Off

• Absolute Advantage

• Opportunity Cost

Joy gives 2 haircuts and 1 perm. Susie gives 3 haircuts and 2 perms. Who has the absolute advantage for haircuts?

• Joy

• Susie

Ana takes 30 minutes to wash the dishes and one hour to vacuum the house. Her husband, Joe, takes 15 minutes to wash the dishes and 45 minutes to vacuum. Who has the absolute advantage for vacuuming?

• Ana

• Joe

The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes. 
Which country has the absolute advantage in producing airplanes? 

• Japan
• US

What should Peru export?

• cars

• tools

• love

• rainbows

Who has the comparative advantage in cars?

• Peru

• neither

• U.S.

• not enough info

What is the opportunity cost of making 1 car in Peru?

• .5 cars

• .75 tools

• 1.3 tools

• 2 tools

What should the U.S. import?

• cars

• tools

• both

• not enough info

Specialization focuses on producing______________.

• a variety of activities or products.

• one particular kind of activity or product.