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Comparative advantage explained in this solution

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Suppose that the supply sides of France and Italy are each described by a simple Ricardian model with two goods, A and B. The technology is as follows.

A B Labor
France 4 2 200
Italy 2 4 200

Who has a comparative advantage in what? Who has an absolute advantage in what?


Solution Summary

This explanation provides you a comprehensive argument relating to Comparative Advantage