1. Consider a nation with a large economy like the United States and a nation with a small
economy like the Dominican Republic. How can the United States, with absolute advantage in
production of almost all goods, benefit from trade with the Dominican Republic?
Big countries with absolute advantage in all relevant goods can still benefit from trade with small
countries. USA can decide to import goods in which Dominican Republic enjoy comparative
advantage in their production and specialize in production in goods that they have comparative
advantage.
Use the following to answer question 2:
Table: The Market for Hamburger Flippers
