If they can produce something with less opportunity cost than the US.
For example (purely academic and theoretical),
to produce 1 million dices, Mexico has to give up 500 cars
However, in the US, to produce 1 million dices, it has to give up 800 cars (due to different factors of production). Thus, Mexico has a comparative advantages over the US.
Nevertheless, it is unlikely that less developed countries can gain comparative advantages over high income countries (except for example: China's sweatshops)
Absolute advantage and comparative advantage are two basic concepts to international trade. Under absolute advantage, one country can produce more output per unit of productive input than another. With comparative advantage, if one country has an absolute (dis)advantage in every type of output, the other might benefit from specializing in and exporting those products, if any exist.A country has an absolute advantage economically over another, in a particular good, when it can produce that good at a lower cost. Using the same input of resources a country with an absolute advantage will have greater output. Assuming this one good is the only item in the market, beneficial trade is impossible. An absolute advantage is one where trade is not mutually beneficial, as opposed to a comparative advantage where trade is mutually beneficial.A country has a comparative advantage in the production of a good if it can produce that good at a lower opportunity cost relative to another country. The theory of comparative advantage explains why it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. What matters is not the absolute cost of production but the opportunity cost, which measures how much production of one good, is reduced to produce one more unit of the other good.
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.
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
a country that makes the good it produuces
comparative advantage
Absolute advantage and comparative advantage are two basic concepts to international trade. Under absolute advantage, one country can produce more output per unit of productive input than another. With comparative advantage, if one country has an absolute (dis)advantage in every type of output, the other might benefit from specializing in and exporting those products, if any exist.A country has an absolute advantage economically over another, in a particular good, when it can produce that good at a lower cost. Using the same input of resources a country with an absolute advantage will have greater output. Assuming this one good is the only item in the market, beneficial trade is impossible. An absolute advantage is one where trade is not mutually beneficial, as opposed to a comparative advantage where trade is mutually beneficial.A country has a comparative advantage in the production of a good if it can produce that good at a lower opportunity cost relative to another country. The theory of comparative advantage explains why it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. What matters is not the absolute cost of production but the opportunity cost, which measures how much production of one good, is reduced to produce one more unit of the other good.
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.
comparative advantage :)
a country that makes the good it produuces
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
A country has comparative advantage if it can produce a good for less cost than any other nation. (study island)A comparative advantage is the condition that exists when someone can produce a good or service at a lower opportunity cost than someone else.
a country that makes the good it produuces
comparative advantage
When the opportunity cost of its production is lower.
comparative advantage
A nation will export goods for which it has a comparative advantage. By exporting goods, it has the comparative advantage because it means they have a lower opportunity cost for producing the good. A country can produce it well and can produce most likely a lot of it.
Country A has a lower opportunity cost for producing televisions