Exam (elaborations)
ECS1601 ASSIGNMENT 2
- Course
- Economics 1B (ECS1601)
- Institution
- University Of South Africa (Unisa)
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By: Maddigits • 1 year ago
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3/28/23, 11:33 AM Assessment 2: Attempt reviewMENU
Dashboard / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 2
Started on Tuesday, 28 March 2023, 10:36 AM
State Finished
Completed on Tuesday, 28 March 2023, 11:33 AM
Time taken 56 mins 54 secs
Marks 20.00/20.00
Grade 100.00 out of 100.00
Question 1
Correct
Mark 1.00 out of 1.00
If two countries have differing opportunity costs of production for two goods, then
a. each country should specialise in the good for which it has a higher opportunity cost of production.
b. only the country with an absolute advantage in the production of both goods stands to gain from trade.
c. each country should purchase inputs from the other country in order to gain an absolute advantage.
d. each country should specialise in the production of the good for which it has a relative advantage.
e.
each country should import all goods instead of producing them domestically.
Your answer is correct.
Absolute advantage is not a prerequisite for international trade. Trade can also be beneficial when one country is more efficient in the
production of both goods. According to the English economist, David Ricardo, who formulated the law of comparative (or relative)
advantage, all that is required for both countries to benefit from trade is that the opportunity costs of production (or relative prices) differ
between the two countries. Each country will tend to specialize in and export those goods for which it has a comparative or relative
advantage. See pages 67 to 70 in the prescribed book.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=8504673&cmid=622341 1/13
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