Absolute and Comparative Advantage
This is a Zero Textbook Cost course. All of course materials will be accessible to you for free within our Blackboard course site.
Required Materials:
Waymaker Macroeconomics from Lumen Learning
- In this course you will use Waymaker Macroeconomics instead of a traditional textbook. Waymaker provides your course materials digitally inside insert our Blackboard course site.
- You can access all readings, videos, a study plan, quizzes and other activities through Blackboard.
- The Waymaker Macroeconomics content can also be accessed offline, but without the interactive components. The ePUB file of the course is attached. For instructions on how to view this type of file see https://courses.
lumenlearning.com/wm- macroeconomics/chapter/pdf/
Additional Resources:
This task covers Units 11-14 of your textbook. There are 3 questions to discuss.
Late submission: -10 points/day.
Make sure you answer, explain, and analyze the questions. Drawing and explaining diagrams for illustration and analysis is encouraged.
Citation is very important; your sources must be properly cited both within and at the end of the text using APA Citation Style. Cite your textbook/Course material, then use other academically reliable/scholarly references.
Save your file as: Last name_First initial_Writing3Macro. For example, Steven Smith’s file will be saved as: Smith_S_Writing1Macro. Save the file as .doc or .pdf
Question 1:
Suppose that the United States and Saudi Arabia can each produce two products, oil and personal computers. The labor requirements per unit of output are provided in the table below:
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Labor Requirements Per Unit of Output
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||
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United States
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Saudi Arabia
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|
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Oil
|
10
|
8
|
|
Personal Computers
|
30
|
4
|
Calculate the labor and opportunity costs for each good, and then compute each country’s absolute and comparative advantage. Use the results to determine what good each country should export and explain your reasoning.
- What does absolute advantage mean? How do you calculate absolute advantage?
- Which country has an absolute advantage in producing oil? Explain using the data from the table.
- Which country has an absolute advantage in producing personal computers? Explain using the data from the table.
- What does comparative advantage mean? How do you calculate comparative advantage?
- In what output(s) does the U.S. have a comparative advantage? Explain using the data from the table.
- In what output(s) does Saudi Arabia have a comparative advantage? Explain using the data from the table.
- What product should each country export? Why?
Question 2 :
1- Why do some nations grow and prosper while others stagnate?
2- How does the current US economic growth differ from the growth of at least two other leading economic powers today? Explain.
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