Comparative Advantage Answers
Definition: Comparative Advantage is the advantage conferred on an individual or nation if it can produce a good at a lower opportunity cost than the other producer.
Example: China has a comparative advantage in many cheap items and that is why many US products are made in China.
1. India gives up less by working on textile so it has the comparative advantage and both nations can benefit.
2. Hank has a comparative advantage in producing coconuts.
3. ¾ of a coconut
Definition: Comparative Advantage is the advantage conferred on an individual or nation if it can produce a good at a lower opportunity cost than the other producer.
Example: China has a comparative advantage in many cheap items and that is why many US products are made in China.
1. India gives up less by working on textile so it has the comparative advantage and both nations can benefit.
2. Hank has a comparative advantage in producing coconuts.
3. ¾ of a coconut