Economics Why Do Countries Trade Questions

Worker Hours to Produce One Unit

Country

United States

Country A

Developing

Country B

Developing

Country C

Developed

Country D

Developed

CORN

(Worker hours to produce one unit)

2

6

8

2

4

CITRUS

(Worker hours to produce one unit)

4

10

10

6

8

APPAREL

(Worker hours to produce one unit)

2

4

6

2

2

COMPUTER SOFTWARE

(Worker hours to produce one unit)

4

12

8

8

4

  1. Use the chart in the lesson to identify one developing country (choose Country A or Country B) and one developed country (choose Country C or Country D) to compare to the United States. Use the tables below to record data from the chart in the lesson for each country. Then respond to the analysis questions.
    Additional research is not required to complete this assignment. Please use only the information provided in the chart in the lesson for countries A, B, C, D, and the United States.
    Table 1: Identify one developing country (A or B) and one developed country (C or D) along with the United States. Complete a trade analysis for agricultural products.
    Hint: Number of additional worker hours to produce one unit of citrus instead of one unit of corn = number of worker hours to produce one unit of citrus – number of worker hours to produce one unit of corn

Corn

Citrus

Number of additional worker hours to produce one unit of citrus instead of one unit of corn

United States

Developing Country __

Developed Country __

  1. Table 2: Identify one developing country and one developed country along with the United States. Complete a trade analysis for industrial products.

Apparel

Computer Software

Number of additional worker hours to produce one unit of computer software instead of apparel

United States

Developing Country __

Developed Country __

  1. Analysis—Using the data you collected, answer each of the following analysis questions in well-written paragraphs in your own words.
    1. Identify an example of absolute advantage relative to the United States from your data tables. Be sure to identify which country has absolute advantage (United States or country A, B, C, D), the product, and data to support your claim. Tip: When considering absolute and comparative advantage, worker hours to produce one unit is a reflection of productivity.
    2. Identify an example of comparative advantage relative to the United States from your data tables. Be sure to identify which country has comparative advantage (United States or country A, B, C, D), the product, and data to support your claim.
    3. Explain why most trade occurs because of comparative advantage. Be sure to provide examples from the data tables or from the lesson to support your answer.

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