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Location: Unemployment, Growth, and the Future
Discussion: absolute/ comparative advantage
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julie.lin |
absolute/ comparative advantage
Aug 31 2007, 2:38 AM EDT
i think after the absolute/comparative advantage lesson, i've gained a new insight on how the contries trade with each other and what forces lead them to know which countries to trade with. one country may have a higher production in a certain product, however, if compared the production and the opportunity cost of the production, there could be a difference and breakthrough in knowing which countries to trade with. the lower the opportunity cost the better. and some countries/ most countries seek for advantages and benefits in the trade. and this is how they determine how and to whom to trade with. the comparative advantage formula and calculation may be confusing at first, but once you understand the concept, its not hard, even if u forget the formula, to figure the numbers out.
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