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Essay

Difference between absolute and comparative advatage

Essay specific features

 

Issue:

Miscellaneous

 

Written by:

Diane S

 

Date added:

August 18, 2012

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 579

 

Was viewed:

7996 times

 

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Essay content:

This occurs because of the existence of reserves of copper ore or bauxite. We can see that in terms of the production of goods, there are obvious gains from specialisation and trade, if Zambia produces copper and exports it to those countries that specialise in the production of other goods or services...
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However, what happens if one country has an absolute advantage over its trading partners in the production of a number of goods. Specialisation and trade can still result in there being welfare gains made from trade. A country has a comparative advantage in the production of a good or service that it produces at a lower opportunity cost than its trading partners...
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