Statistics Canada, in December 2016, Canada sold aircraft and spacecraft worth $113.94 million to China and bought

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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?

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Related Book For  book-img-for-question

Macroeconomics

ISBN: 978-1319120054

3rd Canadian edition

Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson

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