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Ask us gives one country a comparative advantage in the production of a certain good?
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What is one country of comparative advantage in the production of a certain good?
It has a lower opportunity cost for production of that good.
If a country has comparative advantage in the production of all goods should it trade?
Yes, since each country can individually specialize in its comparative advantage, the total income for both countries will increase. This is even true if one country has an absolute advantage in the production of all goods.
When doe one country have a comparative advantage over another country?
When the opportunity cost of its production is lower.
Why does country a have a comparative advantage over country b in the production of televisions?
Country A has a lower opportunity cost for producing televisions
When does Country A have a comparative advantage over Country B in the production of televisions?
Country A has a lower opportunity cost for producing televisions.
Difference between absolute cost advantage theory and comparative cost advantage theory?
absolute cost advantage talks about the efficiency and cheaply a country incure in the production of goods and services against other country whiles comparative advantage talks about the opotunity cost of goods
When does country X have a comparative advantage in the production of coffee?
When they can produce it at a lower opportunity cost than other countries.
What gives a country a comparative advantage?
When it gives up less than others to engage in a particular type of production
Country X would have a comparative advantage in the production of cotton under what circumstance?
Country X didn't have to give up a more profitable form of production in order to grow cotton.
When does County X have a comparative advantage in the production of coffee?
Country X doesn't give up a more efficient form of production in order to grow coffee.
Comparative costs by Adam smith?
The principle of comparative advantage explains how trade can benefit all parties involved (countries, regions, individuals and so on), as long as they produce goods with different relative costs. The net benefits of such an outcome are called gains from trade. Usually attributed to the classical economist David Ricardo, comparative advantage is a key economic concept in the study of trade. Adam Smith had used the principle of absolute advantage to show how a country can benefit from trade if the country has the lowest absolute cost of production in a good (ie. it can produce more output per unit of input than any other country). The principle of comparative advantage shows that what matters is not the absolute cost, but the opportunity cost of production. The opportunity cost of production of a good can be measured as how much production of another good needs to be reduced to increase production by one more unit. The principle of comparative advantage shows that even if a country has no absolute advantage in any product (ie. it is not the most efficient producer for any good), the disadvantaged country can still benefit from specializing in and exporting the product(s) for which it has the lowest opportunity cost of production.[1] [2] It has been argued that it is impossible to falsify the Theory of Comparative Advantage.[3] [4]. The principle of comparative advantageexplains how trade can benefit all parties involved (countries, regions, individuals and so on), as long as they produce goods with different relative costs. The net benefits of such an outcome are called gains from trade. Usually attributed to the classical economist David Ricardo, comparative advantage is a key economic concept in the study of trade. Adam Smith had used the principle of absolute advantage to show how a country can benefit from trade if the country has the lowest absolute cost of production in a good (ie. it can produce more output per unit of input than any other country). The principle of comparative advantage shows that what matters is not the absolute cost, but the opportunity cost of production. The opportunity cost of production of a good can be measured as how much production of another good needs to be reduced to increase production by one more unit. The principle of comparative advantage shows that even if a country has no absolute advantage in any product (ie. it is not the most efficient producer for any good), the disadvantaged country can still benefit from specializing in and exporting the product(s) for which it has the lowest opportunity cost of production.[1] [2] It has been argued that it is impossible to falsify the Theory of Comparative Advantage.[3] [4].
Country x would have a comparative advantage in production of cotton under what circumstance?
Country X didn't have to give up a more profitable form of production in order to grow cotton.
