Comparative Advantage Practice

Based on the production data, which country has an absolute advantage in producing planes?

• The US

• France

• Neither country

• Both countries

Cuba takes 4 hours to make a TV and 12 hours to make salsa. Mexico takes 1 hour to make a TV and 5 hours to make salsa. Which country has an absolute advantage in producing TVs?

• Cuba

• Mexico

• Neither country

• Both countries

The US can produce 20 planes or 2 cruise ships. What is the opportunity cost for the US to produce one plane?

• 10 cruise ships

• 1/10 of a cruise ship

• 20 cruise ships

• 2 cruise ships

The US can produce 20 planes or 2 cruise ships. France can produce 12 planes or 2 cruise ships. Which country has a comparative advantage in producing planes?

• The US

• France

• Neither country

• Both countries

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