Eco121 Macroeconomics
Autor: thuhoavdb • October 7, 2015 • Coursework • 1,346 Words (6 Pages) • 3,264 Views
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ECO121 Macroeconomics
Class: BA0901
Term: Summer2014
Handed out: Submission due: Format: .pdf file
Submission mode: Hardcopy and Softcopy
Email to: tamnt2@fsb.edu.vn tamnt@fpt.edu.vn
STUDENT INFORMATION
Name: | Đào Ngọc Ánh | Roll number: | SB01441 |
Room No: | 3120 | Class: | FB1001 |
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FOR TEACHER ONLY
MARK MARKED BY (NAME AND SIGNATURE)[pic 5]
Signature of Proctor[pic 6]
Individual Assignment 01
Question1. (5 points)
1. a. What is defined as absolute advantage?
Absolute advantage is the ability to produce a good using fewer inputs than another producer.
b. What is defined as comparative advantage?
Comparative advantage is the ability to produce a good at a lower opportunity cost
than another producer.
c. Case 1: Output approach
Two commodities and two countries
Given the resources, Singapore and Malaysia can produce the following products –
television sets and cars (see Table 01)
Countries | TV sets | Cars (units) |
Singapore | 100 | 50 |
Malaysia | 60 | 40 |
Table 01
+ Which country has the absolute advantage in the production of both TV sets and
Cars over the other?
Given the same amount of resources, Singapore can produce more both TV sets and cars than Malaysia, with 100 TV sets and 50 cars compared to 60 and 40 respectively of Malaysia.
➔ Singapore has the absolute advantage in the production of both TV sets and cars over Malaysia.
+ Which country has the comparative advantage either in the production of TV sets or in the production of Cars over the other?
For TV sets:
Singapore: Instead of producing 1 TV set, they can produce 0.5 car
→ The opportunity cost of 1 TV set in Singapore is 0.5 car. Malaysia: Instead of producing 1 TV set, they can produce car[pic 7]
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