AP 1.3 Comparative Advantage

An increase in the productivity of labor with respect to producing good X

An increase in the amount of labor available for production

A reduction in the unemployment of labor

An increase in the demand for good X and good Y

A change in consumer tastes from good Y to good X

U.S. in both cars and textiles

China in both cars and textiles

U.S. in cars, China in textiles

China in cars, U.S. in textiles

The ability to produce more of a good than another producer.

The ability to produce a good at a lower opportunity cost than another producer.

The ability to produce a good using fewer resources than another producer.

The ability to trade more goods than another producer.

Canada in both kites and computers

Panama in both kites and computers

Panama in kites, Canada in computers

Canada in kites, Panama in computers

Ann has a comparative advantage in reading student papers, and Ben has a comparative advantage in typing lecture notes.

Ann has an absolute advantage in reading student papers, and Ben has an absolute advantage in typing lecture notes.

Ben has a comparative advantage in reading student papers, and Ann has a comparative advantage in typing lecture notes.

Ben has a comparative advantage in both reading student papers and typing lecture notes.

Ben has an absolute advantage in both reading student papers and typing lecture notes.

export wheat and import corn

export corn and import wheat

export both wheat and corn

import both wheat and corn

benefit more from trade than will Country B