Would you rather have a comparative or absolute advantage?
If you were President of the US and you were making decisions on trading, would you rather have a comparative or absolute advantage in trading? Can you have both a comparative and absolute advantage in trading? If so, what if at all would be the benefit for your country to trade with any other country?
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I would rather have a comparative advantage. If my country has a comparative advantage in a good, it means that my country can produce the good at a lower opportunity cost than its trading partner. If my country has an absolute advantage in a good, it means that my country can produce the good using ...
Solution Summary
This solution explains a fundmental concept in international trade: absolute and comparative advantage. It presents a case study to show how a developed country can benefit from trade with a developing country.