Where Comparative Advantage Comes From

Differences create the gains

Reading sources off a table

Comparative advantage is not forever

Scale can manufacture a difference

A cold northern country with expensive engineering labor exports aluminum ingots, a hot coastal country with cheap land exports cut flowers, and a country with a century of aircraft-making exports jets. Which assignment of sources is correct?

The valley grows 8 tons of grapes or 4 tons of wheat per field, the plain grows 2 tons of grapes or 6 tons, and they trade grapes for wheat. A new irrigation system raises only the plain's wheat yield from 6 to 9 tons. What happens to the plains grape opportunity cost and the trade pattern?

A highland farm produces 3 tons of coffee or 15 tons of maize per plot, and a riverside farm produces 5 tons of coffee or 10 tons of maize. Compute the highland farm's opportunity cost of one ton of coffee in tons of maize and write the number.

Which of the following is NOT a genuine source of comparative advantage between countries?

A country's textile exports boom for a decade and its wages rise sharply relative to its trading partners. What does the theory predict?

The valley grows 8 tons of grapes or 4 tons of wheat per field, while the plain grows 2 tons of grapes or 2 tons of wheat. Compute the valley's opportunity cost of one ton of wheat in tons of grapes, and write the number.