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    Assignment 1

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    Thùy Nguyễn
    The document provides production data for the US and UK showing they can produce 6 tons of wheat or 4 tons of cloth per hour (US) and 1 ton of wheat or 3 tons of cloth per hour (UK). It asks to determine each country's absolute and comparative advantage, calculate relative costs, identify the pattern of trade if 6 units of wheat = 6 units of cloth, analyze each country's gains from trade, and calculate the equivalent time gained from trade.

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    Assignment 1

    Uploaded by

    Thùy Nguyễn
    9 views1 page
    The document provides production data for the US and UK showing they can produce 6 tons of wheat or 4 tons of cloth per hour (US) and 1 ton of wheat or 3 tons of cloth per hour (UK). It asks to determine each country's absolute and comparative advantage, calculate relative costs, identify the pattern of trade if 6 units of wheat = 6 units of cloth, analyze each country's gains from trade, and calculate the equivalent time gained from trade.

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    The document provides production data for the US and UK showing they can produce 6 tons of wheat or 4 tons of cloth per hour (US) and 1 ton of wheat or 3 tons of cloth per hour (UK). It asks to determine each country's absolute and comparative advantage, calculate relative costs, identify the pattern of trade if 6 units of wheat = 6 units of cloth, analyze each country's gains from trade, and calculate the equivalent time gained from trade.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    9 views1 page

    Assignment 1

    Uploaded by

    Thùy Nguyễn
    The document provides production data for the US and UK showing they can produce 6 tons of wheat or 4 tons of cloth per hour (US) and 1 ton of wheat or 3 tons of cloth per hour (UK). It asks to determine each country's absolute and comparative advantage, calculate relative costs, identify the pattern of trade if 6 units of wheat = 6 units of cloth, analyze each country's gains from trade, and calculate the equivalent time gained from trade.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
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    Assignment 1 - Absolute Advantage and Comparative Advantage

    • The following table shows the wheat and cloth that the US and the UK can
    produce with one hour of time under this situation.

    Labor productivity US UK

    Wheat (ton/hour) 6 1

    Cloth(ton/hour) 4 3

    • Determine which commodity/goods the US and UK have the absolute advantage,


    comparative advantage. Calculate the relative cost for each unit of the product.
    Identify the pattern of trade if we assume 6 units of wheat equal to 6 units of
    cloth. Analyze the gains from trade of each country? Calculate the equivalent time
    (hours) gain from trade. Please provide the discussion and conclusion.

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