Trade, Comparative Advantage & Uneven Adjustment — Drills · Grade 12 Social Studies
Chapter: Global Connections, Risk & Economic InquiryWhat these drills covers
By the end of Trade, Comparative Advantage & Uneven Adjustment you should be able to:
- I can calculate absolute and comparative advantage.
- I can explain a civic or economic mechanism using evidence, assumptions, and a qualified conclusion.
4 questions, written answer, each with a worked explanation.
Vocabulary used: absolute advantage, comparative advantage, terms of trade, tariff, trade balance.
Problem 1
Answer and explanation
Absolute advantage compares input requirements directly. Comparative advantage compares opportunity-cost ratios. A’s cloth cost is lower, while B’s grain cost is lower. Relative tradeoffs can differ even when A is faster at every task.
Problem 2
Answer and explanation
A gives up cloth costing two grain and receives more than two; B obtains cloth for less than its own three-grain cost. Both improve the represented tradeoff under the no-extra-cost assumptions. Other costs or constraints can change that conclusion.
Problem 3
Answer and explanation
The model aggregates possibilities, while jobs, income, costs, and adjustment differ across people and locations. Distribution and transition require separate evidence and institutions. Total gains do not automatically create compensation or an equivalent job.
Problem 4
Answer and explanation
They measure different flows. Trade compares defined exports and imports; the budget compares public spending and revenue. A negative trade balance cannot by itself establish fiscal borrowing, wealth, or overall welfare.