International trade
Answers are for parents and teachers.
1
In country Y 1 unit of flour takes 5 hours and 1 unit of cloth 15 hours. What is the opportunity cost of cloth in units of flour?
3
2
Exports are 30 and imports 24 bn dollars. What is the foreign trade volume in bn dollars?
54
3
Exports are 22 and imports 28 bn dollars. What is the balance in bn dollars (with a minus if negative)?
-6
4
Explain the difference between absolute and comparative advantage in 2–3 sentences.
Absolute advantage — making a good with fewer resources than others; comparative advantage — making the good with the lower opportunity cost, even if one is not better at everything.