Exam (elaborations)
Exam (elaborations) ECS3702 - International Trade (ECS3702) NOV 2021 EXAM MEMO
- Institution
- University Of South Africa (Unisa)
Exam (elaborations) ECS3702 - International Trade (ECS3702)
[Show more]
Content preview
ECS3702OCT/NOV 2021 EXAM MEMO
SPECIFIC FOR JAN/FEB SUPPLEMENTARY EXAMS
FOR FURTHER ASSISTANCE CONTACT
THE BOOK FOUNDATION
+27 63 980 7442
, Question 1
Kenya Lesotho
Tea [ton/hr] 8 2
Wool [ton/hr] 6 4
(i) Identify the commodity in which Kenya and Lesotho have an absolute advantage and
absolute disadvantage. Explain your answer. [4 marks]
(a)
Absolute advantage exists when one country is more efficient than another in the production
of one commodity and absolute disadvantage exists when that same country is less efficient
in the production of a second commodity than the other nation.
In the given scenario, Kenya has an absolute advantage in the production of both goods as it
can produce more of both better than Lesotho. Kenya has 8 ton/hr of tea and 6 ton/hr of wool
compared to the 2 ton/hr of tea and 4 ton/hr of wool for Lesotho. Lesotho has an absolute
disadvantage in the production of both goods.
(ii) Indicate the commodity of each nation’s comparative advantage and disadvantage. No
marks will be awarded if you do not show your workings. [6 marks]
Kenya Lesotho
Tea [ton/hr] �
8 [ � = �. ��]
�
2 [ � = �]
Wool [ton/hr] �
6 [ � = �, ��]
�
4 [ � = �. �]
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TheEconomist. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R99,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75323 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now