Comparative & Absolute Advantage Worksheets PDF

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11. The USA and Germany both have the ability to produce cars and computers. The table below details how many units in millions can be produced in 1 month.

Country/Go Compute od Cars rs USA 50 100 Germany 40 10

A. Draw the production possibilities frontiers for each country (put on one diagram). B. Determine which country has the absolute advantage in cars; in computers. C. Determine which country has the comparative advantage in cars; in computers. D. What should the USA do? What should Germany do? SHOW ALL YOUR WORK

17. Wisteria Lane is holding a bake sale for their community. Susan and Gabrielle each can make cupcakes and brownies. Susan can make 20 cupcakes and 15

brownies in one hour. Gabrielle can make 24 cupcakes and 12 brownies in one hour. Based on this information, discus the following questions. A. Given the information, who has the absolute advantage in making cupcakes; who has the absolute advantage in making brownies? B. Determine which person has a comparative advantage in cupcakes and which person has a comparative advantage in making brownies. Discuss the reasons why this is true. C. Is there a way for Susan and Gabrielle to collaborate that would be advantageous to both? Make sure you provide a complete basis for your answer to this question. Exactly what would each person do?

Use the following information to answer questions 36, 37, 38, 39, 40, and 41

Sawyer and Charlie are “lost” on a remote island and must collect coconuts and pineapples in order to survive. Sawyer can collect the 60 coconuts in one hour or 30 pineapples in one hour. Charlie can collect 50 coconuts in one hour or 40 pineapples in one hour. Based on this information, answer the following questions. 36. Given the above information, who has the absolute advantage in collecting coconuts and who has the absolute advantage in collecting pineapples? A. Sawyer has the absolute advantage in both coconuts and pineapples. B. Charlie has the absolute advantage in both coconuts and pineapples. C. Sawyer has the absolute advantage in coconuts and Charlie has the absolute advantage in pineapples. D. Sawyer has the absolute advantage in pineapples and Charlie has the absolute advantage in coconuts. 37. Given the above information, the opportunity cost of 1 coconut for Sawyer is A. 2 pineapples B. 1.2 pineapples C. 30 pineapples D. ½ or .5 pineapples 38. Given the above information, the opportunity cost of 1 pineapple for Sawyer is A. 60 coconuts B. .75 coconuts C. 2 coconuts D. ½ or .5 coconuts 39. Given the above information, the opportunity cost of 1 coconut for Charlie is A. 4/5 or .8 pineapples B. 5/4 or 1.25 pineapples C. .833 pineapples D. 40 pineapples 40. Given the above information, the opportunity cost of 1 pineapple for Charlie is A. 4/5 or .8 coconuts B. 50 coconuts C. 1.25 coconuts D. .75 coconuts 41. Given the above information, who has the comparative advantage in collecting coconuts and who has the comparative advantage in collecting pineapples? A. Sawyer has the comparative advantage in both coconuts and pineapples. B. Charlie has the comparative advantage in both coconuts and pineapples. C. Sawyer has the comparative advantage in coconuts and Charlie has the comparative advantage in pineapples. D. Sawyer has the comparative advantage in pineapples and Charlie has the comparative advantage in coconuts....