EXERCISE ABSOLUTE DAN COMPARATIVE ADVANTAGE

1. Russia has 1 million society and can produce rice and fish. in this country one person can
produce 10 tons of fish or 5 tons of rice.
Turkey has 10 million society, in this country one person can produce 16 tons of fish or 7
tons of rice.
Determine which country has a comparative advantage in rice and in fish!
2. In your opinion, Can a country at a time lose its comparative advantage in the production
of goods which have long been its main export goods? explain why and what will
happen?
3. Look at this table below !
CASE A CASE B
US GERMAN US GERMAN
Wheat (Ton/Working 4 1 4 1
Hour)
Corn (Ton/Working 1 2 3 2
Hour)

a) The table above shows the quantity of wheat and corn that can be produced in
America and German. in two cases different hypotheses for each case.
Determine the commodity that has absolute advantages and disadvantages in both
countries !
b) Based on the table, show which commodities have comparative advantages and
disadvantages in each country !
4. In your opinion, what is the negative side of international trade?
5. Look at this table below !
ITALY BRAZIL
Shoes Hat Shoes Hat
0 200 100 0
20 160 80 30
40 120 60 70
60 80 40 90
80 40 20 120
100 0 0 160
 a) Based on the table above PPC (Production Probability Curve) for each country !
b) Give 2 example about opportunity cost of each item from both countries based on that
table !
c) Based on the table, show which commodities have comparative advantages and
disadvantages in each country !
d) Why are both willing to trade? even though Italy can meet the needs of its own shoes?
6. What do you think will happen if there is no international trade?