ECS3702 Assignment
2 (COMPLETE
ANSWERS) Semester 2
2024 - DUE 6
September 2024 ;
100% TRUSTED
Complete, trusted
solutions and
explanations.
ADMIN
[COMPANY NAME]
,ECS3702 Assignment 2 (COMPLETE ANSWERS) Semester
2 2024 - DUE 6 September 2024 ; 100% TRUSTED
Complete, trusted solutions and explanations.
Question 1A Use the hypothetical information in the table below
to answer the questions that follow: Output/hr Unos Tres
Cellphones (ton/hr) 18 6 Candles (ton/hr) 6 8 (i) Identify the
product of absolute advantage and disadvantage for both Unos
and Tres. Explain your answer. [4 marks] (ii) From your answer
in (i) above, explain whether trade is possible and explain the
pattern of trade according to the theory of absolute advantage. [4
marks] 2 (iii) Determine the commodity of each nation’s
comparative advantage and disadvantage. No marks will be
awarded if you do not show your workings. [6 marks] 3 (iv)
From your answer in (iii) above, explain whether trade is
possible and the pattern of trade according to the theory of
comparative advantage. [6 marks] [20]
Question 1A
(i) Identify the product of absolute advantage and
disadvantage for both Unos and Tres.
Absolute Advantage refers to the ability of a country to
produce a good more efficiently (i.e., using fewer resources)
than another country.
• Unos:
o Cellphones: 18 tons/hr
o Candles: 6 tons/hr
, • Tres:
o Cellphones: 6 tons/hr
o Candles: 8 tons/hr
Analysis:
• Unos has an absolute advantage in the production of
cellphones because it can produce 18 tons/hr compared to 6
tons/hr for Tres.
• Tres has an absolute advantage in the production of
candles because it can produce 8 tons/hr compared to 6
tons/hr for Unos.
Absolute Disadvantage:
• Unos has an absolute disadvantage in the production of
candles.
• Tres has an absolute disadvantage in the production of
cellphones.
Explanation:
Unos produces cellphones more efficiently (more output per
hour) than Tres, and Tres produces candles more efficiently than
Unos. Absolute advantage is based on the efficiency of
production without considering opportunity costs.
(ii) From your answer in (i) above, explain whether trade is
possible and explain the pattern of trade according to the
theory of absolute advantage.
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