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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.


  1. 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.
  2. Suggest reasons why:
    1. Japan may have a comparative advantage in DVD production.
    2. South Africa may have a comparative advantage in wheat production.
  3. Discuss the relevance of comparative advantage theory in explaining the pattern of trade between Japan and South Africa.