In economic terms, a country has a comparative advantage
when it can produce at a lower opportunity cost than that of trade partners
. While a country cannot have a comparative advantage in all goods and services, it can have an absolute advantage in producing all goods.
When a country has a comparative advantage in the production of a good?
Transcribed image text: When a country has a comparative advantage in the production of a good, it means that
it can produce this good at a lower opportunity cost than its trading partner
. Then the country will specialize in the production of this good and trade it for other goods.
What gives a country a comparative advantage?
In economic terms, a country has a comparative advantage
when it can produce at a lower opportunity cost than that of trade partners
. While a country cannot have a comparative advantage in all goods and services, it can have an absolute advantage in producing all goods.
What does one country have a comparative advantage over another country apex?
Explanation:
When a country manages to produce a good or service at a lower cost of opportunity than its trading partners
, it means that that country has a comparative advantage.
How does comparative advantage affect trade between countries?
The theory of comparative advantage introduces opportunity cost as a factor for analysis in choosing between different options for production. Comparative advantage suggests that
countries will engage in trade with one another
, exporting the goods that they have a relative advantage in.
What creates comparative advantage?
In economics, a comparative advantage occurs
when a country can produce a good or service at a lower opportunity cost
.
The than another country
. The theory of comparative advantage is attributed to political economist David Ricardo, who wrote the book Principles of Political Economy and Taxation (1817).
What is an example of a comparative advantage?
Comparative advantage is
what you do best while also giving up the least
. For example, if you’re a great plumber and a great babysitter, your comparative advantage is plumbing. That’s because you’ll make more money as a plumber.
What is the comparative advantage of the Philippines over other countries?
The Filipino workforce
is one of the most compelling advantages the Philippines has over any other Asian country. With higher education priority, the literacy rate in the country is 94.6% – among the highest. English is taught in all schools, making the Philippines the world’s third largest English-speaking country.
In which situation does one country have a comparative advantage over another country quizlet?
one country has comparative advantage over another in the
production of a particular good relative to other goods if it produces that good less inefficiently (more efficiently) compared with the other country
.
What should a country do if it has a comparative advantage in a product quizlet?
A country with a comparative advantage can
produce a product at a lower opportunity cost
, even if another country has an absolute advantage in the production of all goods.
What products do the Philippines have a comparative advantage in?
Although the Philippines have a comparative advantage in
rice production
, exports were unprofitable for the government-marketing agency in 1977 to 1979. Government control of exports puts a barrier between world and domestic markets so that world quality premiums are not reflected in domestic prices.
What is comparative advantage quizlet?
Comparative Advantage.
The ability of an individual firm or country to produce a good or service at a lower opportunity cost than competitors
. Opportunity Cost. The highest valued alternative that must be given up to engage in an activity.
What does the theory of comparative advantage offer as a guideline to countries?
What does the theory of comparative advantage offer as a guideline to countries?
the ability to produce a product relatively more efficiently, or at a lower opportunity cost
.
How can the law of comparative advantage be applied to country A and country B?
How can the law of comparative advantage be applied to Country A and Country B? (D)
Country A should produce petroleum, and Country B should produce seafood
. … If Country A were to specialize in petroleum, its output would be after two days. If Country B were to specialize in seafood, its output would be after two days.
What is the basis for comparative advantage in the factor endowment model?
A comparative advantage exists
when the opportunity cost of specialization is lower than that of other nations
. … Factor endowments are the land, labor, capital, and resources that a country has access to, which will give it an economic comparative advantage over other countries.
What country has a comparative advantage in producing cars?
Japan
has a comparative advantage in producing cars, since it has a lower opportunity cost in terms of grain given up.
