Ch 5 Global Trade [AP & Reg]

Dduckyhasacomparativeadvantageinclothingproduction

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Unformatted text preview: 7. (Djibouti/Canada) has an absolute advantage in both commodities. (Djibouti/Canada) has a comparative advantage in producing wheat. 28. (Djibouti/Canada) has an absolute disadvantage in both, but a comparative advantage in fish. 29. Advantageous trade can occur between the two when 1 wheat is exchanged for (1/2.5/3) fish. We are going to turn inputs into outputs. In 20 hours, Djibouti can produce an output of 1 wheat or 2 fish. In 60 hours, Canada can produce an output of 1 wheat or 3 fish. [lower # of hours gives absolute advantage] DCC: U.S. Russia DCC: Russia Caviar 6 hours 1C = __W 2 Caviar 16 hours 1C = __ W 4 Wheat 3 hours __ C = 1W Wheat 4 hours __ C = 1W 1/4 1/2 Terms of Trade 3 1 Caviar = __ Wheats 30. (Russia/U.S.) has an absolute disadvantage in both commodities. (Russia/U.S.) has a comparative advantage in wheat. 31. (Russia/U.S) has an absolute advantage in both commodities. (Russia/U.S.) has a comparative advantage in caviar. 31. Advantageous trade can occur between the t...
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