Statistics Canada, in December 2016, Canada sold aircraft and spacecraft worth $113.94 million to China and bought
Question:
Statistics Canada, in December 2016, Canada sold aircraft and spacecraft worth $113.94 million to China and bought aircraft and spacecraft worth only $40.5 million from China. During the same month, however, Canada bought $1,568.2 million worth of apparel and clothing accessories from China but sold only $643,705 worth of apparel and clothing accessories to China. Using what you have learned about how trade is determined by comparative advantage, answer the following questions.
a. Which country has the comparative advantage in aircraft production? In production of apparel and clothing accessories?
b. Can you determine which country has the absolute advantage in aircraft production? In apparel and clothing accessories?
Step by Step Answer:
a If trade is taking place according to comparative adv...View the full answer
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
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