Comparative Advantage Practice



If you wish to skip the lesson and simply apply progress to ten:48. I spend the primary have of the video explaining methods to determine which nation has an absolute merit, calculate alternative value, determine which nation has a comparative merit, and discover a phrases of business that each international locations would spontaneously comply with. The second one part of the video is an supplementary apply questions the place I briefly progress over the solutions. I additionally added the solutions under if you’re in a rush. Thanks for looking at, please subscribe.

Supplementary More than one Selection Questions

Unit 1 Abstract Video (comprises fast and grimy trick)

ANSWERS

Condition #1 (5:30)
The United States can form 20 planes or 2 cruise ships
France can form 12 planes or 2 cruise ships
-The United States has an ABSOLUTE ADVANTAGE in planes
-Neither has an ABSOLUTE ADVANTAGE in cruise ships
-For america, 1 aircraft prices 1/10 cruise send and 1 send prices 10 planes
-For France, 1 aircraft prices 1/6 cruise send and 1 send prices 6 planes
-US has COMPARATIVE ADVANTAGE in planes
-France has COMPARATIVE ADVANTAGE in cruise ships
-Phrases of business: 1 Cruise Send for 7 Planes

Condition #2 (11:12)
Korea can form 3 vehicles or 9 bikes
Germany can form 4 vehicles or 8 bikes
-Germany has an ABSOLUTE ADVANTAGE in vehicles
-Korea has an ABSOLUTE ADVANTAGE in bikes
-For Korea, 1 automotive prices 3 bikes and 1 bike prices 1/3 automotive
-For Germany, 1 automotive prices 2 bikes and 1 bike prices 1/2 automotive
-Germany has COMPARATIVE ADVANTAGE in vehicles
-Korea has COMPARATIVE ADVANTAGE in bikes
-Phrases of business: 1 Automobile for two.5 Bikes

Condition #3 (13:22)
Japan can form 4 computers or 12 telephones
Brazil can form 1 computers or 5 telephones
-Japan has an ABSOLUTE ADVANTAGE in computers
-Japan has an ABSOLUTE ADVANTAGE in telephones
-For Japan, 1 computer prices 3 telephones and 1 telephone prices 1/3 computer
-For Brazil, 1 computer prices 5 telephones and 1 telephone prices 1/5 computer
-Japan has COMPARATIVE ADVANTAGE in computers
-Brazil has COMPARATIVE ADVANTAGE in telephones
-Phrases of business: 1 Computer for 4 Telephones

Condition #4 (16:08)
Cuba takes 4hrs to build a TV and 12hrs to build salsa
Mexico takes 1hr to build a TV and 5hrs to build salsa
-Mexico has an ABSOLUTE ADVANTAGE in TVs
-Mexico has an ABSOLUTE ADVANTAGE in Salsa
-For Cuba, 1 TV prices 1/3 salsa and 1 salsa prices 3 TVs
-For Mexico, 1 TV prices 1/5 salsa and 1 salsa prices 5 TVs
-Mexico has COMPARATIVE ADVANTAGE in TVs
-Cuba has COMPARATIVE ADVANTAGE in salsa
-Phrases of business: 1 salsa for two.5 TVs

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31 thoughts on “Comparative Advantage Practice”

  1. Hey Jacob, I noticed that for determining the terms of trade, there would be a rule of thumb that the term range is between the highest and the lowest opportunity cost of producing a certain product. Is this correct? 😵‍💫

  2. dudeeee. at 12:30 you said 5 and i stopped and re done my calculations and spent an hour rewatching video and reading book bcz before I got 2 to 3 but then I gave up and continued watching and fck u said the same and. u wasted my time :(((

  3. I really appreciate the way you've explained the concepts. My class is an online class because of the hours I work, so as a result I miss the opportunity of live lectures which can be really beneficial. This is a great alternative to that. Thank you so much for taking time out of your life to do these videos and create these review plans. I am so grateful.

  4. sir, pls something is not adding up about the last example between japan and brazil, i think 2 phones is the answer because while will go for 1 laptop for 4 phones when they can produce it with 3 phones, pls just curious. will be glad if you can respond

  5. I'm still trying to understand at 9:30 why France is fine if 1 ship cost 20 planes since 1 ship cost 6 planes for them and that France would go for the deal and that 1 ship cost 10 planes on the US doesn't help in the terms of trade

  6. I was so stressed about how I was going to answer these questions on my midterm bc I was a little lost on this topic but this video gave me so much confidence bc I understood everything so well!! From the bottom of my heart, thank you so much for your work, I will now watch your other videos as I continue to study

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