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Why is comparative advantage important in international trade and economic development?
Comparative advantage is important in international trade and economic development because it allows countries to specialize in producing goods and services that they are most efficient at, leading to increased productivity and economic growth. By trading with other countries based on their comparative advantages, nations can benefit from a wider variety of goods and services at lower costs, ultimately promoting global economic cooperation and development.
When is trade mutually beneficial for two countries?
comparative advantage between two countries
What effect does increasing economic interdependence have on the countries of the worl?
A loss of comparative advantage.......
Does a country have a comparative advantage in the production of some good?
Yes, a country has a comparative advantage in the production of a good when it can produce that good at a lower opportunity cost compared to other countries.
In which country does a comparative advantage in the production of a good exist if it can?
A comparative advantage in the production of a good exists in a country when it can produce that good at a lower opportunity cost compared to other countries.
The law of comparative advantage was developed by who?
David Ricardo is credited with being the person who developed the law of comparative advantage. He first mentioned it in his book "On the Principles of Political Economy and Taxation" in 1817.
Why is comparative advantage important in international trade and economic development?
Comparative advantage is important in international trade and economic development because it allows countries to specialize in producing goods and services that they are most efficient at, leading to increased productivity and economic growth. By trading with other countries based on their comparative advantages, nations can benefit from a wider variety of goods and services at lower costs, ultimately promoting global economic cooperation and development.
When is trade mutually beneficial for two countries?
comparative advantage between two countries
What effect does increasing economic interdependence have on the countries of the worl?
A loss of comparative advantage.......
Does a country have a comparative advantage in the production of some good?
Yes, a country has a comparative advantage in the production of a good when it can produce that good at a lower opportunity cost compared to other countries.
In which country does a comparative advantage in the production of a good exist if it can?
A comparative advantage in the production of a good exists in a country when it can produce that good at a lower opportunity cost compared to other countries.
Factors responsible for countries comparative advantage?
natural resources man-power governmental policies
What gives china its comparative advantage over developed countries?
china is a great exporter and importer,
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 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.
How can one calculate the terms of trade to determine comparative advantage in trade?
To calculate the terms of trade and determine comparative advantage in trade, one can use the formula: Terms of Trade Price of Exports / Price of Imports. By comparing the terms of trade between countries, one can identify which country has a comparative advantage in producing certain goods or services.
Who had presented comparative advantage theory?
The theory of comparative advantage was presented by economist David Ricardo in the early 19th century. Ricardo argued that countries should specialize in producing goods and services in which they have a lower opportunity cost, and then trade with other countries to maximize overall production and consumption.
