Jim Whitney

Economics 131

  The Ricardian trade model and comparative advantage

	Output (Q) per hour		Opportunity cost of each...
Country name	Razors (R)	Wigs (W)	Razor (R)	Wig (W)
1:
2:
3:
4:

COUNTRIES 1 AND 2:
Comparative Productivities:
Country 1 is ______ as productive as country 2 in R and ______ as productive in W.
Country 2 is ______ as productive as country 1 in R and ______ as productive in W.
Mark the information which correctly completes these sentences:

Compared to country 2, country 1 has its	biggest productivity advantage	in	razors.
	smallest productivity disadvantage		wigs.
Compared to country 1, country 2 has its	biggest productivity advantage	in	razors.
	smallest productivity disadvantage		wigs.

Comparative Opportunity Costs:
Comparing 1 and 2: which country has the lower opportunity cost for producing razors? ______
                               which country has the lower opportunity cost for producing wigs?   ______
Absolute advantage (A/A) and comparative advantage (C/A):
For countries 1 and 2, according to either comparative productivities or comparative costs:
In razors, ______ has the absolute advantage and ______ has the comparative advantage.
In wigs, ______ has the absolute advantage and ______ has the comparative advantage.

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COUNTRIES 3 AND 4:
Comparative Productivities:
Country 3 is ______ as productive as country 4 in R and ______ as productive in W.
Country 4 is ______ as productive as country 3 in R and ______ as productive in W.
Mark the information which correctly completes these sentences:

Compared to country 4, country 3 has its	biggest productivity advantage	in	razors.
	smallest productivity disadvantage		wigs.
Compared to country 3, country 4 has its	biggest productivity advantage	in	razors.
	smallest productivity disadvantage		wigs.

Comparative Opportunity Costs:
Comparing 3 and 4: which country has the lower opportunity cost for producing razors? ______
                               which country has the lower opportunity cost for producing wigs?   ______
Absolute advantage (A/A) and comparative advantage (C/A):
For countries 3 and 4, according to either comparative productivities or comparative costs:
In razors, ______ has the absolute advantage and ______ has the comparative advantage.
In wigs, ______ has the absolute advantage and ______ has the comparative advantage.