Global supply chains and comparing economies
Grade 12 Social Studies Worksheet
Circle the best answer.
Read this first
GDP per person in six countries, 2023
Country At market exchange rates (U.S. dollars) At PPP (international dollars) United States 82,587 82,587 Germany 54,777 72,262 Mexico 13,831 25,188 China 12,951 25,200 India 2,434 9,853 Nigeria 2,139 8,712 Note: World Bank, World Development Indicators (NY.GDP.PCAP.CD and NY.GDP.PCAP.PP.CD), 2023, retrieved Nov 14, 2026. Card B: GDP per person at market exchange rates converts each country's GDP into U.S. dollars at the exchange rate. GDP per person at purchasing power parity (PPP) adjusts for differences in price levels so that a dollar buys about the same bundle of goods in each country; for the United States the two match. Imports from abroad are paid for at the exchange rate. Card C: GDP per person is total GDP divided by the number of people. It is an average, not what a typical person earns.
Pia compares China and Mexico on the chart. Which statement is best supported?
- They are equal on both measures, because price adjustments remove the differences between the two incomes
- Mexico is ahead on both measures, since 13,831 is above 12,951 and PPP merely rescales both figures alike
- At market rates they are close (12,951 and 13,831); at PPP almost equal (25,200 and 25,188)
- China is far ahead at PPP, since its PPP figure is nearly twice its market figure, which Mexico's is not
Bo divides the PPP figure by the market figure for India and for Germany. Which statement is best supported?
- India's average person buys 4 times more than Germany's, since India's ratio of PPP to market is 4
- Prices are lower in Germany, since its PPP figure of 72,262 is far above India's PPP figure of 9,853
- Prices are lower in India than Germany: PPP is about 4 times the market figure there, 1.3 for Germany
- Prices are the same in both, because both figures are expressed in international dollars at PPP
A writer says a typical person in India lives on 9,853 international dollars a year. Jun tests this with card C. What is the best reply?
- Not supported: GDP per person is an average across the population, not what a typical person earns
- Supported: GDP per person is the main figure available, so it must stand for a typical income
- Not supported: the figure is in international dollars, which no person in India actually earns or spends
- Supported: PPP adjusts for prices, so 9,853 is what each person in India can buy in a year
Kira asks when to use market rates and when to use PPP. Which statement is best supported by card B?
- Use market rates for any purpose, since they show the dollar value directly and need no adjustment
- PPP for what incomes buy at home; market rates for buying abroad, where imports use exchange rates
- Use PPP for any purpose, since it removes the effect of price differences and so is better in each case
- Market rates for what incomes buy at home; PPP for buying abroad, where local prices do not apply
Luz ranks the six countries at market rates and at PPP. Which statement is best supported?
- No countries swap places, since PPP rescales each country's figure by about the same amount as others
- India and Nigeria swap places, since PPP lifts the poorest country by the largest amount of the six
- Mexico and China swap places, which shows China's people have become richer than Mexico's people
- Mexico and China swap places, but the swap rests on a gap of 12 PPP dollars, so it means little
Output per worker-day in two made-up countries
Good Tavon Rusk Shirts 10 6 Tables 5 2 Note: Tavon and Rusk are made up. Card A: Each country has 10 workers. Before trade, each puts 5 workers on shirts and 5 on tables. Card B: Opportunity cost is what must be given up. A country has a comparative advantage in a good when its opportunity cost of making it is lower. Card C: When two countries trade, each gains if it receives more for an export than the export costs it to make at home. Card D: In each country, workers in the industry that shrinks must find work in another industry. Card E: Shipping a table from Tavon to Rusk costs the equivalent of 0.7 shirts, paid by Tavon.
Tavon makes more of both goods per worker. Milo asks whether trade still helps. Which statement is best supported by card B?
- Yes, with Rusk making tables, since Rusk would give up fewer workers than Tavon to make each table
- Yes: a table costs Tavon 2 shirts but Rusk 3, and a shirt costs Rusk one third of a table
- No: Tavon is better at both goods, so Rusk has nothing it could offer Tavon in a trade between the two
- Yes, with Tavon making shirts, since it makes 10 per worker-day against Rusk's 6 per worker-day
Tavon and Rusk agree to trade one table for 2.5 shirts. Noah asks who gains. Which statement is best supported by card C?
- Both: Tavon gets 2.5 shirts for a table that costs it 2; Rusk pays 2.5 for one that would cost 3
- Tavon gains but Rusk loses, since Tavon is better at making both goods and Rusk pays the price
- Rusk gains but Tavon loses, since Rusk gets a table that Tavon makes better than Rusk could
- Neither: a table is worth 2.5 shirts to each side, so the trade leaves each exactly where it was
Tavon puts 7 workers on tables and 3 on shirts; Rusk puts all 10 on shirts. Ren compares the totals with card A's split. Which statement is right?
- Gains need full specialization: if a country keeps a few shirt workers it loses the whole gain
- Shirts rise from 80 to 90 while tables stay at 35, using the same 20 workers
- Tables fall to 25 as Tavon moves workers to shirts, so total output is lower than before trade
- Shirts rise by 30, the gain in Rusk's output, while tables stay at 35 with the same workers
A lawmaker says trade based on comparative advantage makes everyone better off. Tala tests it with card D. What is the best reply?
- True: trade makes each worker better off, since output rises for the country as a whole group
- Total output rises, but card D says workers in the shrinking industry must move, so not all gain
- True: comparative advantage means a lower cost, so prices fall for each buyer in both countries
- False: trade lowers output in the country with the weaker economy, so the claim fails there
Card E: shipping a table costs Tavon 0.7 shirts. At 2.5 shirts per table, Ari asks whether trade still helps Tavon. Which answer is right?
- Yes: Tavon still gets 2.5 shirts, which is more than the 2 shirts a table costs to make
- Yes: shipping is paid in shirts, so it does not change what Tavon gives up in the trade
- Yes: Tavon nets 3.2 shirts after shipping, which is more than the 2 shirts a table costs it
- No: after 0.7 shirts of shipping Tavon nets 1.8 shirts for a table that costs it 2
