Trade and Comparative Advantage (AQA A-Level Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What is a key benefit of specialization through international trade?
What is a key benefit of specialization through international trade?
Firms achieve economies of scale
What does absolute advantage mean?
What does absolute advantage mean?
Producing more output with given resources
Atlantis produces 4 guns or 2 butter per unit. Pacifica produces 1 gun or 6 butter. Who has absolute advantage?
Atlantis produces 4 guns or 2 butter per unit. Pacifica produces 1 gun or 6 butter. Who has absolute advantage?
Atlantis in guns, Pacifica in butter
Without specialization: 5 guns, 8 butter. With specialization: 8 guns, 12 butter. What are the gains?
Without specialization: 5 guns, 8 butter. With specialization: 8 guns, 12 butter. What are the gains?
3 guns and 4 butter
What is the 'double coincidence of wants' condition for trade?
What is the 'double coincidence of wants' condition for trade?
Each country must want the other's goods
How is comparative advantage measured?
How is comparative advantage measured?
By opportunity cost
Atlantis gives up 2 guns to make 1 butter. Pacifica gives up 1 gun to make 1 butter. Who has comparative advantage in butter?
Atlantis gives up 2 guns to make 1 butter. Pacifica gives up 1 gun to make 1 butter. Who has comparative advantage in butter?
Pacifica (lower opportunity cost)
If one country has absolute advantage in both goods, where is its comparative advantage?
If one country has absolute advantage in both goods, where is its comparative advantage?
Where its absolute advantage is greatest
What does the comparative advantage theory assume about returns to scale?
What does the comparative advantage theory assume about returns to scale?
Constant returns to scale
What is competitive advantage?
What is competitive advantage?
Producing better quality at lower prices