Comparative and absolute advantage in international trade

2020-03-28 08:57

1. Define key terms such as international trade, factors of production, production possibilities, absolute advantage, comparative advantage, and terms of trade. 2. Explain how international trade creates interdependent relationships between countries. 3. Describe how factors of production influence the exports and imports of countries. 4.Absolute Advantage& Comparative Advantage. Before we get too carried away, let's stop for the four key terms you're going to need to master to fully understand international trade: Absolute advantage refers to a countrys ability to produce a certain good more efficiently than another country. comparative and absolute advantage in international trade

Feb 24, 2011 Absolute advantage and comparative advantage are two terms that are widely used in international trade. Both terms deal with production, goods and services. Absolute advantage is a condition in which a country can produce particular goods at a lower cost in comparison to another country. On the

Mar 31, 2015 Absolute advantage and comparative advantage are two important concepts in international trade that largely influence how and why nations devote limited resources to the production of particular goods. They describe the basic economic benefits that countries get from trading with one another. Opportunity cost measures a tradeoff. A nation with a comparative advantage makes the tradeoff worth it. The benefits of buying their good or service outweigh the disadvantages. The country may not be the best at producing something. But the good or service has acomparative and absolute advantage in international trade Absolute advantage and comparative advantage are two important concepts in international trade that largely influence how and why nations devote limited resources to the production of particular goods.

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