ECO203: (International Economics) Consider two countries – Country A and Country B – producing two goods – Good X and Good Y.

Module / Subject / School:

ECO203: International Economics

Singapore University of Social Sciences (SUSS)

Requirements: 

Consider two countries – Country A and Country B – producing two goods – Good X and Good Y.

Using all its resources, Country A can produce either 50X or 100Y. Using all its resources, Country B can produce either 40X or 110Y.

(a) Assume constant opportunity costs. Derive the comparative advantages in the production of the goods. Present using a table and describe your answers. Solve for a mutually beneficial Terms of Trade (in terms of 1X: _Y, to the nearest 0.5 units). (Word limit: 250 words)

(10 marks)

What we score:

80%

Our Writer’s Comment 

This assignment tests students on their understanding of the concepts.

Based on the assignment requirements provided, here are some comments to help students score well on this assignment:

Step-by-Step Approach

Start by clearly calculating the opportunity costs for each country when producing Goods X and Y. Since you’re working with constant opportunity costs, this part should be straightforward—just remember that opportunity cost is what you give up to produce something else. Once you’ve calculated these, you can determine which country has the comparative advantage in producing each good. A table is a great way to present this information clearly, so make sure it’s well-organized and easy to read.

Deriving the Comparative Advantage

When explaining comparative advantage, be concise but thorough. Clearly state which country should specialize in which good based on the lower opportunity cost. Your description should demonstrate a strong understanding of how comparative advantage works and why it’s beneficial for both countries to trade.

Solving for Terms of Trade

For the Terms of Trade, calculate a rate that benefits both countries, meaning each country gets more of the other good than they would by producing it themselves. Present this as 1X: _Y, rounded to the nearest 0.5 units, as required. Briefly explain why this rate is mutually beneficial, showing that both countries gain from trade.

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Sample Assignment

While we have scored well for this assignment, we do not provide any sample assignment for this. If you’d like us to work on this, you can try our model assignment writing service.