PEMARKAHAN
PEG 3033: EKONOMI ANTARABANGSA
TUTORIAL 2
DISEDIAKAN OLEH :
NAMA NO. MATRIK NO PHONE
NURUL AIN HIDAYAH BINTI SUTRISNO D20181083568 019-7621995
PENSYARAH : DR. SHAHRUN NIZAM BIN ABDUL AZIZ
KUMPULAN : A
PEG3033 – TUTORIAL 2
1. Country A can produce either 1,000 units of good X or 2,000 units of good Y if it uses
all its resources and costs are constant. Currently, Country A doesn’t trade and
consumes 500 units of good X and 1,000 units of good Y.
a. Draw country A’s production possibilities frontier.
Y X
500 1000 1000 2000
It is a straight line because cost are constant. Currently consuming at
(500,1000) = (x,y).
𝑃
For country a = +2 = Marginal Rate Of Transformation
𝑃
𝑃
b. Illustrate country A’s autarky equilibrium. : Autarky equlibirum will be at
=2
𝑃
c. If country B offers to trade good X and good Y with country A at = 3.
Would country A trade with country B? Why, or why not?
: Yes, because when 𝑃 = 3, the more productive country’s labor is and the
𝑃
fewer units of labor will produce each good of good X and good Y.
d. Country C offers to trade good X and good Y with country A at a price ratio of
1. Show that, even if country A continues to produce 500 units of good X and
1,000 units of good Y, residents of country A would be better off if they
exchanged with country C. Would country A export good X or good Y?
Would country A import good X or good Y?
: Country A will export good X while country B will import good Y.
e. Compared with part (d), how would the amount of trade exchange if country A
specialised its production according to comparative advantage? Would country
A specialise in good X or good Y? Would the country specialise partially or
completely?
: for Country B marginal rate of transformation is 3, Country B has to give up
3 units of Good Y to get 1 unit of Good X. But country A only have to give up
2 unit of good Y for good X.
So, comparative advantage in Good X.
While country B can produce good Y at lower cost of Country A is cost of
Good Y is .
So, comparative advantage in good Y. Both countries can engage in partially
advantages trade.
