Chapter 19: Q1 (page 460)
True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.
The statement - comparative advantage must be due to natural elements, is False
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How can there be any economic gains for a country from both importing and exporting the same good, like cars?
In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who has the absolute advantage in production of sweaters? Who has the absolute advantage in the production of wine? How can you tell?
In World Trade Organization meetings, what do
you think low-income countries lobby for?
You just got a job in Washington, D.C. You move
into an apartment with some acquaintances. All your roommates, however, are slackers and do not clean up after themselves. You, on the other hand, can clean faster than each of them. You determine that you are 70% faster at dishes and 10% faster with vacuuming. All of these tasks have to be done daily. Which jobs should you assign to your roommates to get the most free time overall? Assume you have the same number of hours to
devote to cleaning. Now, since you are faster, you seem to get done quicker than your roommate. What sorts of problems may this create? Can you imagine a trade-related analogy to this problem?
Can a nation’s comparative advantage change over
time? What factors would make it change?
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