Quantities of labour embodied per unit of goods and in country are given by and , while the same for country are given by and . Country , therefore, enjoys comparative advantage in
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4 marks, −1International EconomicsTheories of international tradeAbsolute and comparative advantageModerateabout 2 min
JNU SIS 2011 Question 13: Theories of international trade
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Quantities of labour embodied per unit of goods X₁ and X₂ in country A are given by 0· 3 and 0· 7, while the same for country B are given by 0· 2 and 0· 9. Country A, therefore, enjoys comparative advantage in (A) X₁ (B) X₂ (C) Neither X₁ nor X₂ (D) Both X₁ and X₂
Also written as: Quantities of labour embodied per unit of goods X_1 and X_2 in country A are given by 0* 3 and 0* 7, while the same for country B are given by 0* 2 and 0* 9. Country A, therefore, enjoys comparative advantage in
Theories of international trade has come up 151 times in 6 exams since 2006.
What this question tests
This question is on Absolute and comparative advantage, part of Theories of international trade in International Economics.
Why countries trade: producing more cheaply in absolute terms, or at lower opportunity cost.
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