Comparative advantage

Q3 Deduce the outcome when Ireland and Japan each trade in the sector where their advantage lies.

Q4 Deduce which country gives up less to make watches or batteries, from two countries' maximum output table.

Q5(b) Choose the rise that would hand the US comparative advantage in steel (corporation tax / economic growth / steelworker productivity / steelworker wages).

Q5 Deduce what two countries' output possibilities for televisions and computers show about absolute and comparative advantage.

Q5 Two countries' maximum production possibilities for shoes and bags are tabulated; assess what this establishes about the gains from trade, comparative advantage and absolute advantage.

Q9 Choosing one developed country, evaluate the possible gains from specialisation and trade (context: Italy and Canada have smaller service shares of GDP than the UK and USA).

Q6 Two countries' maximum output of lorries and cars is tabulated; settle which conclusion on absolute and comparative advantage holds.

Q1 India specialises in services and China in manufacturing. Identify what is likely to occur if each specialises and trades according to comparative advantage. (higher world output / fewer exports and imports / lower living standards / more absolute poverty)

Q1(b) Use comparative advantage theory to explain why CETA could raise GDP in both Canada and the EU.