Assignment 1 : Tools of Market Access AnalysisUse the following data to compute Balassa Indices to determine the Revealed Comparative Advantage for the products listed in the table below. RumSugarBananasRiceTotal Exports of Product by country 1 in 2021(thousand dollars)1200900600850Total Exports of Country 1 in 2021 (thousand dollars)600,000600,000600,000600,000World exports of Product in 2021 (thousand dollars)1,200,0001,600,000900,0001,500,000World exports of all Products in 2021 (thousand dollars)250,500,000250,500,000250,000,000250,000,000RCA Rank the products in the order of comparative advantage. Which product is the country best advised to specialize in?

The comparative advantage refers to the production capability of any firm or country through…

Answered: Assignment 1 : Tools of Market Access…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Assignment 1 : Tools of Market Access Analysis

Use the following data to compute Balassa Indices to determine the Revealed Comparative Advantage for the products listed in the table below.

	Rum	Sugar	Bananas	Rice
Total Exports of Product by country 1 in 2021(thousand dollars)	1200	900	600	850
Total Exports of Country 1 in 2021 (thousand dollars)	600,000	600,000	600,000	600,000
World exports of Product in 2021 (thousand dollars)	1,200,000	1,600,000	900,000	1,500,000
World exports of all Products in 2021 (thousand dollars)	250,500,000	250,500,000	250,000,000	250,000,000
RCA

Rank the products in the order of comparative advantage. Which product is the country best advised to specialize in?

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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