1. International Trade

What is absolute advantage? What is comparative advantage?

Give an example where you have an absolute but not a comparative advantage

Why should we specialize and trade?

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larryrambo777Lv10

10 Mar 2023

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28 Sep 2019

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Related questions

According to international trade theory, a country should:

import goods in which it does not have a comparative advantage.
export goods in which it does not have a comparative advantage.
export goods in which it does not have an absolute advantage.
import goods in which it has a comparative advantage.

scarletporpoise64

What is absolute advantage? Why do economists consider comparative advantage as a basis of trade better than an absolute advantage?

ochreoyster771

Suppose only two people on the frontier: Susy and Bob, and two goods: rifles and shelter. If Susy has the comparative advantage in producing rifles, and Bob has the absolute advantage in producing both goods, then: a. No gains from trade can be made and Bob should produce in isolation. b. Bob has a comparative advantage in rifles as well. c. Bod has the comparative advantage in producing shelter. d. Susy should specialize in creating shelter. Explain definitions of comparative advantage and absolute advantage while giving answer please... I believe it is A