Question 1 (i)(a)
Absolute advantage: Brazil and Vietnam
2 marks
- Time to write
- About 4 minutes
Question
Question 1 (i)(a) · 2 marks- The table below gives the number of units of wheat and cloth that two countries: Brazil and Vietnam: can produce in one day when they use all of their available resources:
| Country | Wheat (units/day) | Cloth (units/day) |
|---|---|---|
| Brazil | 48 | 24 |
| Vietnam | 36 | 12 |
- Which of the countries has the absolute advantage in the production of each good?
Reworded from the university paper: names and figures differ, the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- (i)–(a)2 items, each marked on its own: give each its share.
What the paper leaves open
The punctuation around the two country names (a colon, then a dash) is as printed.
Write it in this order
- 1 Absolute advantage in wheat, with the comparison 1 mark 2 min
- 2 Absolute advantage in cloth, with the comparison 1 mark 2 min
Try it first. About 4 minutes for 2 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Rule. A country has an absolute advantage in a good when it can produce more of that good than the other country with the same resources (here, all its resources for one day).
| Country | Wheat (units/day) | Cloth (units/day) |
|---|---|---|
| Brazil | 48 | 24 |
| Vietnam | 36 | 12 |
Wheat. Brazil can produce 48 units a day against Vietnam's 36, so Brazil has the absolute advantage in wheat (12 units more a day).
Cloth. Brazil can produce 24 units a day against Vietnam's 12, so Brazil has the absolute advantage in cloth as well (twice Vietnam's output).
Answer. Brazil has the absolute advantage in both wheat and cloth. As with any country that is more productive in both goods, this does not by itself rule out gains from trade: that depends on comparative advantage, which is decided by opportunity costs, not by absolute output.
Where the 2 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Absolute advantage in wheat, with the comparison | 1 |
| 2 | Absolute advantage in cloth, with the comparison | 1 |
| Total | 2 |
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