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Pearson Edexcel IAL Economics 4.3.2.1b theory of comparative advantage:

Practise using production tables and country examples to distinguish absolute from comparative advantage and predict gains from specialisation.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
A2

Exam points

  • use output tables to compare opportunity costs and decide comparative advantage
  • distinguish absolute advantage from comparative advantage in country production data
  • predict the effect of specialisation and trade on world output and living standards

4.3.2.1b - theory of comparative advantage: • the distinction between absolute and comparative question 1

[Maximum number: 1]

The table shows the maximum production possibilities for Country X and Country Y in a given year.

Table for Question 4.3.2.1b - theory of comparative advantage: • the distinction between absolute and comparative question 1 — Edexcel A-Level Economics A2

Which one of the following can be deduced from this table?

A

Neither country will benefit from specialisation and trade

B

Country X has a comparative advantage over Country Y in the production of bags and shoes

C

Country Y has an absolute advantage over Country X in the production of bags and shoes

D

There is no opportunity cost for either country in producing bags or shoes

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