Explore BrainMass

Comparative and Absolute Disadvantage

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Illustrate, using a hypothetical scenario (data), how a nation could have an absolute disadvantage in the production of two goods and could still have a comparative advantage in the production of one of them.

© BrainMass Inc. brainmass.com October 25, 2018, 9:41 am ad1c9bdddf

Solution Preview

This is the whole reasoning behind comparative advantage.

Country A produces Good X for 3, Good Y for 6

Country B produces Good X for 4, ...

Solution Summary

Can a country has comparative advantage even if it is absolutely disadvantaged in all of its goods? This answer says yes, that's the essence of comparative advantage.

See Also This Related BrainMass Solution

Financial Analysis

1. Discuss the significance of the law of comparative advantage in international trade. Define a multinational corporation and explain its importance.

2. Explain the difference between the accept/reject decision and the ranking decision.

3. Discuss why might a firm choose a best efforts offering for an IPO?

View Full Posting Details