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Comparative advantage, specialization, and trade

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Pat Protectionist thinks the U.S. imports too many goods from low-wage countries like China. Pat will often point out products that have "made in China" labels on them and laments the fact that "most things sold in Wal*Mart are imported." Pat is a mechanical engineer and a manufacturers representative. Pat sells a variety of products to manufacturing companies like Eastman Kodak, Bombardier, etc. Pat performs relatively high-skilled high-paid work and also enjoys frequent vacations to Europe.

Do you see any conflicts between Pat's statements and work? Do you see any conflicts between Pat's statements and trips to Europe?

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Comparative advantage, specialization, and trade are discussed in the solution.

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The relationship between the Pat's statements and the work he performs for these companies is directly related in the sense that if companies like Kodak start outsourcing their work to low wage countries or in ...

Solution provided by:
Sheetal Jain, PGDM
Education
  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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