Comparative Advantage Worksheet
Explore the economic principle of comparative advantage and its implications for international trade with this Grade 9 worksheet.
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Comparative Advantage
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Read each question carefully and answer to the best of your ability. This worksheet will test your understanding of comparative advantage.
1. What is comparative advantage?
The ability to produce a good at a lower absolute cost than another producer.
The ability to produce a good at a lower opportunity cost than another producer.
The ability to produce more of all goods than another producer.
The ability to consume more of all goods than another producer.
2. Who first described the concept of comparative advantage?
Adam Smith
Karl Marx
David Ricardo
John Maynard Keynes
3. Comparative advantage explains why countries should specialize in producing goods and services where they have a lower .
4. When countries specialize and trade based on comparative advantage, it leads to increased overall and economic efficiency.
5. A country can have an absolute advantage in producing all goods, but it cannot have a comparative advantage in producing all goods.
True
False
6. Comparative advantage is based on the idea that trade is a zero-sum game, meaning one country benefits at the expense of another.
True
False
7. Explain the difference between absolute advantage and comparative advantage.
8. Provide an example of how two countries could benefit from trade based on comparative advantage.