Absolute and comparative advantage (video)
Watch the video International trade: absolute and comparative advantage and then answer the questions below. You can watch this in the window below, or follow the previous link to open the video in a new web window.
- While watching the video, draw the production possibility frontiers associated with the examples they give. Use these diagrams to explain which country has a comparative advantage for each DVDs and which country for wheat production.
- Suggest reasons why:
- Japan may have a comparative advantage in DVD production.
- South Africa may have a comparative advantage in wheat production.
- Discuss the relevance of comparative advantage theory in explaining the pattern of trade between Japan and South Africa.