Comparative Advantage Practice

Which country has the absolute advantage in producing cars?

• Korea

• Germany

• Both Korea and Germany

• Neither Korea nor Germany

Which country has the absolute advantage in producing TVs?

• Cuba

• Mexico

• Both Cuba and Mexico

• Neither Cuba nor Mexico

What is the opportunity cost for the US to produce one plane?

• 10 cruise ships

• 1/10 cruise ship

• 6 cruise ships

• 1/6 cruise ship

Which country has a comparative advantage in producing planes?

• The US

• France

• Both the US and France

• Neither the US nor France

What is the opportunity cost for the United States to produce one cruise ship?

• 1/10 of a plane

• 10 planes

• 1/6 of a cruise ship

• 6 planes

Which country has a comparative advantage in producing planes?

• The US, because it gives up 1/10 of a cruise ship per plane.

• France, because it gives up 1/6 of a cruise ship per plane.

• The US, because it gives up 10 planes per cruise ship.

• France, because it gives up 6 planes per cruise ship.

What is a possible terms of trade for 1 cruise ship that would benefit both the US and France?

• 5 planes

• 7 planes

• 10 planes

• 12 planes

Which country has a comparative advantage in producing cars?

• Korea, because it gives up 3 motorcycles per car.

• Germany, because it gives up 2 motorcycles per car.

• Korea, because it gives up 1/3 of a car per motorcycle.

• Germany, because it gives up 1/2 of a car per motorcycle.

Which country has a comparative advantage in producing cars?

• Korea

• Germany

• Neither

• Both

What is the opportunity cost for Brazil to produce one laptop?

• 3 phones

• 4 phones

• 5 phones

• 1/5 of a phone