Lecture 1

Question 1

L1 :What is absolute advantage and what is comparative advantage?

Answer 1

1. Absolute: the ability of an individual, company, or country to produce a good or service more efficiently than competitors, using fewer resources or at a lower cost.
2. Comparative: ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors.

Question 2

L1: Give one example of comparative and absolute advantage.

Answer 2

Absolute: SG does not have barley to produce wine, but Scotland is a major producer of barley, making it a large exporter of wine.

Comparative: More efficient for UK to export coal as a large exporter compared to other countries with limited Coal.

Question 3

L1: What is Economy Of Scales?

Answer 3

Lower Per Unit Cost with a higher volume of cargo transported.

Question 4

L1: What are the 6 major types of vessels?

Answer 4

1. Ro-Ro carrier
2. Dry Bulk carrier
3. Liquid Bulk carrier
4. Container vessel
5. Break Bulk carrier
6. LNG, LPG –> Gas Tankers