Comparative Advantage Practice

The table below shows the unit labour hours it takes to produce 1 unit of Tea and Coffee. Which country has the absolute advantage in Tea?

	Tea	Coffee
Country A	25	5
Country B	12	4

The table below shows the unit labour hours it takes to produce 1 unit of both Tea and Coffee. Which country has the Comparative Advantage in Tea?

	Tea	Coffee
Country A	25	5
Country B	12	4

The table below shows the unit labour hours it takes to produce 1 unit of Tea and Coffee. What is the opportunity cost for Country A of producing 1 unit of Coffee?

	Tea	Coffee
Country A	25	5
Country B	12	4

The table below shows the unit labour hours it takes to produce 1 unit of Tea and Coffee. Which of the following statements is true?

	Tea	Coffee
Country A	75	25
Country B	30	15

A) Country A has a Comparative Advantage in Tea.

B) Country B has a Comparative Advantage in Tea.

C) No trade occurs.

D) Country A has an Absolute Advantage in Tea.

The table below shows the unit labour hours it takes to produce 1 unit of Tea and Coffee. If Country A has a comparative advantage in Tea, what must be true of X?

	Tea	Coffee
Country A	X	10
Country B	20	5

A) X is greater than 2.5.

B) X is less than 40.

C) X is greater than 40.

D) X is less than 2.5

The table below shows the unit labour hours it takes to produce one unit of Tea and Coffee. If Country A has the Comparative Advantage in Coffee, what must be true of X?

	Tea	Coffee
Country A	45	9
Country B	20	X

A) X has to be greater than 4.

B) None of the above.

C) X has to be equal to 4.

D) X has to be less than 4.

The table below shows the maximum output of Tea and Coffee that can be made in Country A and B using all factors of production. Which country has the absolute advantage in Coffee?

	Tea	Coffee
Country A	20	4
Country B	24	6

The table below shows the maximum output of Tea and Coffee that can be made in Country A and B using all factors of production. Which country has the comparative advantage in Tea?

	Tea	Coffee
Country A	20	4
Country B	24	6

The table below shows the maximum output of Tea and Coffee that can be made in Country A and B using all factors of production. What is the opportunity cost of Coffee for Country A?

	Tea	Coffee
Country A	20	4
Country B	24	6

The table below shows the maximum output of Tea and Coffee that can be made in Country A and B using all factors of production. Which of the following statements is true?

	Tea	Coffee
Country A	35	7
Country B	8	48

A) Country A has an absolute advantage in Coffee.

B) Country B has a comparative advantage in Tea.

C) Country A has a comparative advantage in Tea.

D) No Trade occurs.

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