Global supply chains and comparing economies

Grade 12 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Hours of work to make one unit (made up)

   Good	Kesh	Loma
   Cloth (one bolt)	2	6
   Grain (one sack)	4	8

   Note: Kesh and Loma are made up. Card A: Each country has 240 hours of work to use. Card B: A country has an absolute advantage in a good when it makes the good with fewer hours. Opportunity cost is what must be given up: if a pencil takes 1 hour and a notebook takes 3, making one notebook costs 3 pencils. Card C: A country has a comparative advantage in a good when its opportunity cost of making it is lower. Card D: A bicycle (made up) is built in five steps in five places: steel in Ore Valley, tubes in Pipetown, wheels in Rimport, assembly in Mill City and sale in Shoreview. Each step needs the product of the one before it. Card E: Mill City keeps wheels for 5 days of assembly. A port closure delays the next wheel shipment from Rimport by 12 days.

2. 1.

   Pia finds what Kesh gives up to make one sack of grain, using card B and the chart. Which statement is right?

   • Nothing, because Kesh uses fewer hours than Loma on both goods and so loses nothing
   • Two bolts of cloth: a sack takes 4 hours and a bolt takes 2
   • Half a bolt of cloth: a bolt takes 2 hours and a sack takes 4, so a sack is half
   • Four bolts of cloth: a sack takes 4 hours, so it costs 4 bolts of cloth
3. 2.

   Bo finds what Loma gives up to make one sack of grain. Which statement is right?

   • About 0.75 bolt of cloth: a bolt takes 6 hours and a sack takes 8, so a sack is 6 over 8
   • About 1.3 bolts of cloth: a sack takes 8 hours and a bolt takes 6
   • Two bolts of cloth, the same as Kesh, because the same two goods are traded by both countries
   • Eight bolts of cloth: a sack takes 8 hours, so it costs 8 bolts of cloth
4. 3.

   Kesh needs fewer hours than Loma for both goods. Jun asks who has the comparative advantage in grain. Which answer fits card C?

   • Both, because each country can make grain with the hours it has
   • Loma: a sack costs it about 1.3 bolts, against 2 bolts for Kesh
   • Kesh, because it needs fewer hours (4) than Loma (8) to make a sack of grain
   • Neither, because Kesh is better at both goods and so has the advantage in each
5. 4.

   Kira asks who has the comparative advantage in cloth. Which answer fits card C?

   • Neither, because Loma has the comparative advantage in grain and so lacks it in cloth
   • Loma, because a bolt costs it 6 hours and the higher number means more production
   • Kesh, because it makes a bolt in 2 hours, the same as it makes two other things
   • Kesh: a bolt costs it 0.5 sack, against 0.75 sack for Loma
6. 5.

   Kesh is better at both goods. Luz asks whether Kesh gains by trading with Loma. Which answer fits?

   • Yes: Kesh should make grain and buy cloth, because grain takes more hours to make
   • No: Loma is worse at both goods, so trading with Loma would waste Kesh's hours
   • Yes, but Loma gains and Kesh does not, because Kesh is better at both goods
   • Yes: Kesh gains by making cloth and buying grain from Loma, whose grain costs less
7. 6.

   Card E: Mill City holds 5 days of wheels, and Rimport's shipment is 12 days late. Milo asks how long assembly stops. Which answer is right?

   • Seven days: the stock covers the first 5 of the 12 days of delay
   • Seventeen days, the stock plus the delay, since waiting adds the two together
   • Five days, the length of the stock, since that is how long the wheels last
   • Twelve days, the full length of the delay, since stock does not change when wheels arrive
8. 7.

   The wheel shipment from Rimport is delayed. Noah asks which steps of card D are delayed. Which answer fits?

   • Five steps, because one late step stops the whole chain from start to end
   • Tubes and wheels, because they are the two parts that go into the frame
   • Assembly and the sale, which come after wheels; steel and tubes come before
   • Just wheels, because the late shipment is Rimport's own and nothing else is affected
9. 8.

   The chain makes steel, tubes, wheels, assembly and sale in five places. Ren asks what the five places show about trade. Which statement fits?

   • The five places show that trade lowers the cost of each step by the same amount, whatever it is
   • A delay in one place reaches the earlier places too, including steel and tubes
   • Each place is independent, so a delay in one place does not reach the others
   • Each place does one step, and trade links them, so a delay in one place reaches later places
10. 9.

    A student says Kesh should make both goods and skip trade. Tala tests it with card A's 240 hours. Which reply is best?

    • Kesh's 240 hours are fixed, so trade lets it spend each hour where its cost is lowest
    • The student is right: 240 hours are enough to make 60 sacks and 120 bolts together
    • The student is wrong: Kesh has too few hours to make both goods, so it must trade
    • The student is right: a country better at both goods gains nothing from trade, so skip it
11. 10.

    Ari checks which output uses all of Kesh's 240 hours exactly. Which pair fits the chart?

    • 60 bolts and 60 sacks: 120 hours plus 240 hours, which is more than Kesh has
    • 60 bolts and 30 sacks: 120 hours plus 120 hours
    • 60 bolts and 15 sacks: 120 hours plus 60 hours, which leaves hours unused
    • 120 bolts and 30 sacks: 240 hours plus 120 hours, which is more than Kesh has