Frequent Exam Questions without Answers
Comparative Advantage
Chapter 15 ― Question 1
The output per worker in the USA and Great Britain is as follows:
| USA | GB | |||
| Product A | 3 | 6 | ||
| Product B | 15 | 6 |
1) Which country has an absolute advantage in A?
2) Which country has an absolute advantage in B?
3) Which country has a comparative advantage in A?
4) Which country has a comparative advantage in B?
Questions 3 and 4 require calculating opportunity costs. To find out the opportunity costs of 1 American B, divide what America gives up by what it gains. 15 Bs cost 3 A. 1 B costs 3/15 A or 1/5 A.
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Chapter 15 ― Question 4
Your roommate and you have to write a paper for your economics class. It requires very much researching. You have realised too late that it is due the day after tomorrow. You are better at writing and at researching than your roommate. Why would any economist in the world - with the exception of your instructor - recommend that one of you should do all the writing and the other one all the researching? Use the table below to make the point.
| Time needed for researching | Time needed for writing | |
| You | 20 hours | 8 hours |
| Your roommate | 30 hours | 15 hours |
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Chapter 15 ― Question 5
Let's ignore for a moment that your instructor is likely to find out that the two papers were written by the same student. Which important thing do economists ignore when they advocate Ricardo's theory?
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