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****If the world consists of only three countries 1, 2 and 3. The trade pattern between this world is as follows:
****If the world consists of only three countries 1, 2 and 3. The trade pattern between this world is as follows:
Country of Origin Exports ($million) Exported to
Country 1 45 Country 2
Country 1 55 Country 3
Country 2 35 Country 1
Country 2 25 Country 3
Country 3 45 Country 1
Country 3 15 Country 2
34. According to the information in the above table, Country 1 has a _________________and country 2 has a ______________________.
a. Trade surplus; trade deficit.
b. Trade surplus; zero net trade balance.
c. Trade surplus; trade surplus.
d. Trade deficit, Zero net trade balance.
35. Country's 1 share of global trade is.
a. 40.9%
b. 22.7%
c. 18.2%
d. 45.4%
36. If country D has an absolute advantage over country E in the production of all goods and services, then country D may gain from international trade with country E, but country E can not gain.
a. True.
b. False.
***The following table shows the production of food and equipment by two countries, country A and country B. Answer Questions 37-40 accordingly
Country A output Country B output
Food 500 tons 600 tons
Equipment 200 units 120 units
37. From the above information, which country has an absolute advantage in the production of equipment.
38. Which country has an absolute advantage in the production of food.
39. Which country has a comparative advantage in the production of equipment.
40. Which country has a comparative advantage in the production of food.
