Page 1Page 2NameECONOMICS 452 QUIZ 3A“The Miracle of Trade” The Economist 01-27-1996 & “Trade Winds” The Economist 11-08-19971. True or False (explain): A country or region can fail to have comparativeadvantage in anything.2. True or False (explain): A country or region can have comparative advantage ineverything.3. Suppose China is worse at making bicycles than Korea (absolute disadvantage).Explain how China could still have a comparative advantage in producingbicycles.4. Suppose Japan has an absolute advantage at producing autos compared to theUnited States. Explain how Japan might not have a comparative advantage inproducing autos.5. Why does the relative price of cheese to wine have to be the same in the twocountries under free trade?6. How does the relative price of cheese to wine under free trade compare to theprices in the countries before trade.7. Why might wages in one country fall below wages in another country under freetrade?8. What counters complaints that low wages are a source of unfair competition andcomplaints that workers in developing countries are
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