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Study 4.1.4 (HL)—Trade quantity and value calculations conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

[Maximum number: 2]

Country X and Country Y are capable of producing both apples and bananas. Assume a two-country, two-product model.

Country Y has absolute advantage in the production of both apples and bananas, and comparative advantage in the production of bananas.

Calculate the change in expenditure on imported oranges as a result of the increase in demand.

$100000 \times 2-40000 \times 2$

Any valid working is sufficient for [1].
NB Workings which measure market demand, rather than the demand for imports (so the calculation is $160000 \times 2-100000 \times 2$ are not valid.
= $120000

An answer of $120 000 or 120000 without any working or with invalid working as exemplified above is sufficient for [1].

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IB Economics HL 4.1.4 Hl Trade Quantity and Value Calculations Topic Practice

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Question 1