Suppose that the following information represents the complete trade data for three countries.

Exports ($) Imports ($)

Country A

Good x 8 000. 4 000

Good y 12 000 5 000

Good z 10 000 0

Country B

Good r 0 7 000

Good s 1 900 9 000

Good t 1 600 3 000

Country C

Good m 8 000 3 400

Good n 5 000 2 500

Good o 5 400 2 800

(a) Calculate the intra-industry trade index for each commodity category in each country.

(b) Calculate the intra-industry trade index for total trade in each country.

(c) Use trade theory to explain the usefulness of these indices in determining each country's trade patterns.

Note: You may use either the Balassa index or the Grubel-Lloyd index for your calculations.