05.

04 Trade Analysis
1. Use the chart in the lesson to identify one developing country (choose Country A or
Country B) and one developed country (choose Country C or Country D) to compare to
the United States. Use the tables below to record data from the chart in the lesson for
each country. Then respond to the analysis questions.

Additional research is not required to complete this assignment. Please use only the
information provided in the chart in the lesson for countries A, B, C, D, and the United
States.

Table 1: Identify one developing country (A or B) and one developed country (C or

D) along with the United States. Complete a trade analysis for agricultural products.

Hint: Number of additional worker hours to produce one unit of citrus instead of one unit
of corn = number of worker hours to produce one unit of citrus – number of worker hours
to produce one unit of corn

Corn Citrus Number of additional worker hours to

produce one unit of citrus instead of one
unit of corn

United States 2 4 2

Afghanistan 7 10 3

Australia 2 5 3

2. Table 2: Identify one developing country and one developed country along with the
United States. Complete a trade analysis for industrial products.

Apparel Computer Number of additional worker hours to

Software produce one unit of computer
software instead of apparel

United States 2 5 2

Afghanistan 4 6 2
Australia 3 7 4

3. Analysis—Using the data you collected, answer each of the following analysis
questions in well-written paragraphs in your own words.
1. Identify an example of absolute advantage relative to the United States from
your data tables. Be sure to identify which country has absolute advantage
(United States or country A, B, C, D), the product, and data to support your claim.
Tip: When considering absolute and comparative advantage, worker hours to
produce one unit is a reflection of productivity.
i. The U.S. has absolute advantage over the other two countries because
they have more resources compared to the other countries and can make
the products at lower $$
2. Identify an example of comparative advantage relative to the United States from
your data tables. Be sure to identify which country has comparative advantage
(United States or country A, B, C, D), the product, and data to support your claim.
i. The U.S. has comparative advantage b/c they require less time compared
to other countries.
3. Explain why most trade occurs because of comparative advantage. Be sure to
provide examples from the data tables or from the lesson to support your answer.
i. Most trade occurs because of comparative advantage because it allows
countries to use what they have to make their specialty goods.