nternational Trade Worksheet ECO/372
Use the information in the graphs below to fill in the blanks. Each graph represents the country’s production possibilities assuming full employment and efficient use of available resources. Use the graphs to determine how much each country would be able to produce assuming it specializes according to its comparative advantage.
Consumption Production if there Units of Consumption
and production is specialization output traded in the free
if no trade or according to Exports (-) trade
specialization comparative advantage Imports (+) equilibrium
Country A 100 wheat ________ wheat – 80 wheat ________ wheat
25 TVs ________ TVs + 40 TVs ________ TVs
Country B 40 wheat ________ wheat + 80 wheat ________ wheat
40 TVs ________ TVs – 40 TVs ________ TVs
With no trade or specialization, total consumption is equal to 140 units of wheat and __________ TVs.
After specialization and free trade, total consumption is equal to 200 units of wheat and __________ TVs.
As a result of specialization and trade, world output of wheat rose by 60 units and world output of TVs
rose by __________ units.