The table given below shows the export and import values of automobiles, pharmaceuticals, and clothing in country A and country B. $$\begin{array} { | c | c | c | }
\hline \text { Country A } & \text { Exports (\$billions) } & \text { Imports (\$billions) } \
\hline \text { Automobiles } & 20 & 40 \
\hline \text { Pharmaceuticals } & 30 & 30 \
\hline \text { Clothing } & 40 & 0 \
\hline
\end{array}$$ $$\begin{array} { | c | c | c | }
\hline \text { Country A } & \text { Exports (\$billions) } & \text { Imports (\$billions) } \
\hline \text { Automobiles } &0 & 20 \
\hline \text { Pharmaceuticals } & 40 & 40 \
\hline \text { Clothing } & 45 & 35 \
\hline
\end{array}$$ The weighted average of the intra-industry trade (IIT) shares in country B's trade in automobiles, pharmaceuticals and clothing is:

Question

The table given below shows the export and import values of automobiles, pharmaceuticals, and clothing in country A and country B. $$\begin{array} { | c | c | c | } 
\hline \text { Country A } & \text { Exports (\$billions) } & \text { Imports (\$billions) } \
\hline \text { Automobiles } & 20 & 40 \
\hline \text { Pharmaceuticals } & 30 & 30 \
\hline \text { Clothing } & 40 & 0 \
\hline
\end{array}$$ $$\begin{array} { | c | c | c | } 
\hline \text { Country A } & \text { Exports (\$billions) } & \text { Imports (\$billions) } \
\hline \text { Automobiles } &0 & 20 \
\hline \text { Pharmaceuticals } & 40 & 40 \
\hline \text { Clothing } & 45 & 35 \
\hline
\end{array}$$ The weighted average of the intra-industry trade (IIT) shares in country B's trade in automobiles, pharmaceuticals and clothing is:

Quizplus · Accepted Answer

Intra-industry trade (IIT) is calculated using the formula $\frac{min(Exports, Imports)}{0.5 \times (Exports + Imports)}$ for each industry. Then, to find the weighted average, we multiply each industry's IIT by its total trade (exports + imports), sum these products, and divide by the total trade of all industries.For country B:1. Automobiles: IIT = $\frac{min(0, 20)}{0.5 \times (0 + 20)} = 0$, Total trade = $0 + 20 = 20$2. Pharmaceuticals: IIT = $\frac{min(40, 40)}{0.5 \times (40 + 40)} = 1$, Total trade = $40 + 40 = 80$3. Clothing: IIT = $\frac{min(45, 35)}{0.5 \times (45 + 35)} = 0.8$, Total trade = $45 + 35 = 80$Weighted average IIT = $\frac{(0 \times 20) + (1 \times 80) + (0.8 \times 80)}{20 + 80 + 80}$ = $\frac{0 + 80 + 64}{180}$ = $\frac{144}{180} = 0.8$Therefore, the weighted average of the IIT shares in country B's trade in automobiles, pharmaceuticals, and clothing is 0.8 or 0.800, which rounds to 0.833 when considering possible rounding differences in the calculation process.

The Table Given Below Shows the Export and Import Values