Global Connections, Risk & Economic Inquiry — Chapter Practice, Grade 12

Absolute advantage compares input requirements directly. Comparative advantage compares opportunity-cost ratios. A’s cloth cost is lower, while B’s grain cost is lower. Relative tradeoffs can differ even when A is faster at every task.

A gives up cloth costing two grain and receives more than two; B obtains cloth for less than its own three-grain cost. Both improve the represented tradeoff under the no-extra-cost assumptions. Other costs or constraints can change that conclusion.

The model aggregates possibilities, while jobs, income, costs, and adjustment differ across people and locations. Distribution and transition require separate evidence and institutions. Total gains do not automatically create compensation or an equivalent job.

They measure different flows. Trade compares defined exports and imports; the budget compares public spending and revenue. A negative trade balance cannot by itself establish fiscal borrowing, wealth, or overall welfare.

A has absolute advantage in both goods. Cloth costs A two grain and B three, while grain costs A half a cloth and B one-third. Thus A has comparative advantage in cloth and B in grain. Exchanging one cloth for 2.5 grain can benefit both under the supplied assumptions because the rate lies between two and three. Feasible quantities, distribution, and extra costs remain separate questions.

Compare absolute input requirements.

Calculate opportunity costs.

Compare exchange terms with both costs.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Not necessarily. Comparative advantage concerns relative opportunity costs rather than speed alone. Different ratios can allow gains under suitable terms and assumptions, while adjustment and distribution still require analysis.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

No under the stated model: A gives up cloth costing two grain and receives only 1.5. The proposed rate is outside the mutually advantageous range. Feasibility, extra costs, and distribution still need separate analysis.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

The balance is −30 units. It does not establish public spending minus tax revenue, national wealth, or every household’s welfare. Specify scope, period, and accounting categories before comparing other measures.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

The units determine the conversion direction. Dollars per euro multiplies a euro amount into dollars, while the reciprocal quote works in the other direction. An unlabeled number cannot establish which currency strengthened or what an item costs.

They hold different currencies and face prices stated in different units. The fixed euro item becomes costlier in dollars, while a fixed dollar item becomes cheaper in euros. Contracts, fees, and price responses may change real outcomes.

Input costs, contracts, demand, quantities, and financing can also change. A converted sales-price advantage is one channel, not the whole profit calculation. Examine the firm’s currency exposures and relevant records.

State the assumed quotation, convert with units, test alternative rates and costs, and identify the obligation’s timing. Do not treat one quote as a guaranteed future amount or omit charges from a real comparison.

The price converts from $100 to $120, a twenty percent increase in dollar cost under the assumptions. The euro appreciates and the dollar depreciates relative to each other. The exercise does not establish actual market rates, purchases, or profit effects. Seller prices, fees, contracts, and demand are held outside this simple conversion.

Multiply €100 by each dollar-per-euro rate.

Compare $100 and $120.

State price-response limits.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

No. Import costs, export prices, inputs, debts, contracts, and demand differ. Identify the business’s exposures and compare channels rather than applying one directional label as a universal verdict.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

The price is $100. The reciprocal rate is €0.80 per dollar. Units establish the conversion direction; the example is not a current market quotation or a complete transaction cost.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Dollar revenue and euro-input costs respond through different channels and conditions. Quantities, contracts, prices, and other costs can also change. A converted export-price advantage does not alone establish the net profit effect.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Population can rise proportionately. In the supplied case, 100/50 and 120/60 both equal two. The larger total does not establish higher average output per person or universal improved conditions.

Operation requires complementary resources, maintenance, institutions, and access. Spending records show inputs or acquisition, while service and outcome records show what changed. Explain the channel and actual use.

Output can grow enough to outweigh the efficiency change. The supplied intensity falls ten percent while total use rises eight percent. State both measures and examine the mechanism rather than transferring the ratio’s direction to the total.

State current and future costs, timing, distribution, uncertainty, relevant constraints, and alternatives. Define how the forecast would be tested. A predicted gain does not establish universal access or eliminate future risks.

Intensity falls from ten to nine energy units per output, a ten percent decline. Total energy use rises eight percent. Thus the quoted claim is false for this packet: efficiency per unit improves while total use increases. The arithmetic does not establish the cause or full environmental effect; resource type, technology, and other evidence would add context.

Divide energy by output.

Calculate changes relative to original measures.

Separate ratios from totals.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

No. Production, distribution, capabilities, services, rights, environmental conditions, and unpaid activity require different measures. GDP can remain useful within its scope while other evidence is needed for a broader judgment.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Per-person output is two in both periods. Total output rises twenty percent while per-person growth is zero. Neither average identifies every resident’s income or broader development conditions.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

The stock ends at 95, a decline of five under the model. Actual ecosystems require evidence about renewal, timing, quality, and other changes. The simple balance is not a real environmental forecast.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Equity is the smaller residual after debt. The same $10 asset loss removes half the original $20 equity while reducing $100 assets by ten percent. Fixed debt in the example concentrates the change on the residual.

Liquidity concerns payment timing and available resources; insolvency concerns insufficient asset value relative to obligations. Temporary funding may address timing while losses remain. Identify both balance-sheet and cash-flow evidence.

Its underlying claims may share borrowers’ conditions, collateral markets, or other exposures. Pooling changes allocation and may reduce some idiosyncratic risk, but correlated losses remain. Examine the actual connections and model assumptions.

They are different outcomes measured through different records and periods. Financial conditions can improve while employment, debt, or housing hardships persist. Compare channels and distribution without transferring one indicator to every household.

Equity falls from $20 to $10. Assets decline ten percent, while equity declines fifty percent. The loss is magnified relative to the smaller residual under fixed-debt assumptions. The packet does not establish cash timing, asset-sale effects, regulatory treatment, or a complete historical cause; those require additional evidence.

Subtract debt from assets.

Compare asset loss with initial assets.

Compare equity loss with initial equity.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

No. It redistributes claims and exposures. Borrower performance, collateral, correlation, information, and contract terms still matter. A pool or rating is not a guarantee against common losses.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Equity falls from 50 to 30, a forty percent loss, while assets fall ten percent. Fixed debt magnifies the residual change. Liquidity, valuation reliability, and further transactions are excluded from this balance-sheet model.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Identify adoption, implementation, defined outcomes, dates, comparable measures, distribution, and alternative explanations. The recommendation establishes a proposed mechanism, not completed action or measured success. Distinguish findings, dissent, and later evidence.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Payments may be due before savings accumulate, and income or costs may vary. Annual totals identify a resource gap under assumptions, while timing and certainty require additional records. Label missing terms instead of assuming costless bridging funds.

The obligation occurs over its own dates and conditions. Income, spending, and education timing may differ then. A plan’s prior annual saving margin does not prove each later installment can be met.

Under the specified twelve-month assumptions, modeled saving falls from $1,800 to $600 and both gaps increase by $1,200. It exposes vulnerability in the plan; it does not prove the shock will occur or identify a universally best response.

It states accurate calculations, goals, assumptions, a serious alternative, timing constraints, risk, and the evidence that could change the judgment. It can reach a decision while acknowledging limits, rather than promising a certain outcome or refusing to compare options.

Net prices are $3,000 and $2,500; each plan generates $1,800 modeled annual saving; gaps are $1,200 for A and $700 for B. B’s smaller gap is one advantage under the assumptions, not proof of identical outcomes or universal superiority. Tuition dates, income certainty, excluded costs, and financing terms remain essential. Annual saving cannot automatically pay an earlier obligation.

Subtract grants.

Multiply each $150 monthly margin by twelve.

Compare gaps and missing payment dates.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Yes. Use accurate evidence, comparable units, explicit priorities, a serious alternative, and a limitation. A different supported judgment is acceptable; invented terms, arithmetic errors, or guaranteed forecasts are not.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Each margin becomes $50 monthly and $600 annually. A’s $3,000 net price leaves $2,400; B’s $2,500 leaves $1,900. Each gap rises $1,200. The scenario is conditional and leaves timing and financing unanswered.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

L1 total repayment is $1,320 and charge $120; L2 is $1,440 and charge $240. The smaller L2 installment has higher total cost. Affordability, repayment-period resources, and timing remain different criteria; these are not formal APR calculations.

Response criteria

• Explain the relevant institution or economic concept accurately; show correct calculations where needed.
• Connect supplied evidence and stated assumptions to an explained conclusion.
• Compare feasible options and their effects on different people without stereotypes.
• Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.