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?© BrainMass Inc. brainmass.com December 15, 2020, 8:48 pm ad1c9bdddf
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 ...
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.