The comparative advantage stems from the ability to produce goods and services at low opportunity costs, which is influenced by how available economic resources (also called factors of production) are and how good their quality is. For
Comparative Advantage
Reasons Why International Trade Exists
International trade exists for several reasons. First, differences in demand underlie trade. Certain products we want are not produced in the country. Instead, they are only available in other countries. So, we have to import to get
Comparative Advantage: Meaning, Assumptions, Examples, Criticisms
What's it: Comparative advantage is a favorable position arising from producing goods and services at a lower opportunity cost. This concept is important in explaining international trade and specialization in production. That answers why
Absolute Advantage: Examples, Assumptions, Criticism
What's it: Absolute advantage refers to the ability to produce goods or services more efficiently than others. As a result, those with this advantage can produce at a lower absolute cost. Absolute advantage is important for explaining why