AP Microeconomics Topic 1.4 Comparative Advantage

Which country has the absolute advantage in producing grain?

• Big Country

• Little Country

• Neither country

• Both countries

What is the opportunity cost for Big Country to produce 1 ton of meat?

• 1/2 ton of grain

• 2 tons of grain

• 1 ton of meat

• 40 tons of grain

Which country has the comparative advantage in the production of meat?

• Big Country

• Little Country

• Neither country

• Both countries

For trade to be mutually beneficial, 1 ton of grain must be worth how many tons of meat?

• Less than 1/2 ton of meat

• More than 1 ton of meat

• Between 1/2 ton and 1 ton of meat

• Exactly 1 ton of meat

If 1 ton of grain is traded for 3 tons of meat, how do Big Country and Little Country fare?

• Big Country benefits, Little Country is hurt.

• Little Country benefits, Big Country is hurt.

• Both countries benefit.

• Neither country benefits.

If 1 ton of grain is traded for 1/4 ton of meat, what is the outcome for Big Country and Little Country?

• Big Country benefits, Little Country is hurt.

• Little Country benefits, Big Country is hurt.

• Both countries benefit.

• Neither country benefits.

What is a key benefit of specialization and trade for countries?

• It allows countries to produce beyond their production possibilities.

• It allows countries to consume beyond their production possibilities.

• It eliminates the need for comparative advantage.

• It always leads to equal benefits for all trading partners.

Based on the provided data, who has the comparative advantage in vacuuming?

• Ashley

• Omar

• Neither Ashley nor Omar

• Both Ashley and Omar

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