Specialization & Comparative Advantage Comparative Advantage.

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Specializat ion & Comparative Advantage Comparative Advantage

Transcript of Specialization & Comparative Advantage Comparative Advantage.

Page 1: Specialization & Comparative Advantage Comparative Advantage.

Specialization & Comparative Advantage

Comparative Advantage

Page 2: Specialization & Comparative Advantage Comparative Advantage.

Specialization & Comparative Advantage

COMPARATIVE ADVANTAGE

Assumptions:•Two Nations•Two Different Goods•Constant Opportunity Costs•Straight Line PPCs

•Different PPCs•Technology•Resources•Costs

Page 3: Specialization & Comparative Advantage Comparative Advantage.

Specialization & Comparative Advantage

• Input vs. Output• Absolute Advantage• Comparative Advantage• Specialization• Gains from Trade

COMPARATIVE ADVANTAGE

Graphically...

Page 4: Specialization & Comparative Advantage Comparative Advantage.

Specialization & Comparative Advantage

PRODUCTION POSSIBILITIES

Co

ffee

(to

ns)

Co

ffee

(to

ns)

45

40

35

30

25

20

15

10

5

0

30

25

20

15 10 5

05 10 15 20 25 30 5 10 15 20

Wheat (tons) Wheat (tons)

Curve For Each CountryUnited States Brazil

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Specialization & Comparative Advantage

Total output will be greatest when each good is produced by the nation that has the lowest opportunity cost for that good.

Principle of Comparative Advantage

PRODUCTION POSSIBILITIES


Copyright 2008 The McGraw-Hill Companies 5-1 International Linkages United States and World Trade Specialization and Comparative Advantage The Foreign.

Copyright 2008 The McGraw-Hill Companies 5-1 International Linkages United States and World Trade Specialization and Comparative Advantage The Foreign.

Creating Comparative Advantage

Creating Comparative Advantage

comparative absolute advantage

comparative absolute advantage

Across-Product versus Within-Product Specialization in ...€¦ · value isoquants). Relatively high costs drive countries out of industries at odds with their comparative advantage.

Across-Product versus Within-Product Specialization in ...€¦ · value isoquants). Relatively high costs drive countries out of industries at odds with their comparative advantage.

Changing Revealed Comparative Advantage of Textile … · Changing Revealed Comparative Advantage of ... Changing Revealed Comparative Advantage of Textile and Clothing 522 ... footwear

Changing Revealed Comparative Advantage of Textile … · Changing Revealed Comparative Advantage of ... Changing Revealed Comparative Advantage of Textile and Clothing 522 ... footwear

Chapter 3: Has US Comparative Advantage Changed? Does This ... · Comparative advantage motivates people to trade. Because comparative advantage comes from differences in relative

Chapter 3: Has US Comparative Advantage Changed? Does This ... · Comparative advantage motivates people to trade. Because comparative advantage comes from differences in relative

Comparative Advantage, International Trade, and Fertility · Comparative Advantage, International Trade, and Fertility ... Comparative Advantage, International Trade, and Fertility

Comparative Advantage, International Trade, and Fertility · Comparative Advantage, International Trade, and Fertility ... Comparative Advantage, International Trade, and Fertility

Introduction Classical economics and comparative advantage Analysis of comparative advantage

Introduction Classical economics and comparative advantage Analysis of comparative advantage

Comparative Advantage and Heterogeneous Firms · in comparative advantage industries than in comparative disadvantage industries. ... Comparative Advantage and Heterogeneous Firms

Comparative Advantage and Heterogeneous Firms · in comparative advantage industries than in comparative disadvantage industries. ... Comparative Advantage and Heterogeneous Firms

Comparative Advantage in Innovation and Production · Comparative Advantage in Innovation and Production ... Comparative Advantage in Innovation and Production ... Ever since the

Comparative Advantage in Innovation and Production · Comparative Advantage in Innovation and Production ... Comparative Advantage in Innovation and Production ... Ever since the

Absolute Advantage, Comparative Advantage, Specialization, and Trade AP Macroeconomics and AP Microeconomics Ms. Flora.

Absolute Advantage, Comparative Advantage, Specialization, and Trade AP Macroeconomics and AP Microeconomics Ms. Flora.

Comparative Advantage: Scarcity Comparative Advantage: Scarcity.

Comparative Advantage: Scarcity Comparative Advantage: Scarcity.

Comparative Advantage, or Competitive Advantage in ...ageconsearch.umn.edu/bitstream/230031/2/2016SAEA_AgEconSearch... · 1 Comparative Advantage, or Competitive Advantage in Explaining

Comparative Advantage, or Competitive Advantage in ...ageconsearch.umn.edu/bitstream/230031/2/2016SAEA_AgEconSearch... · 1 Comparative Advantage, or Competitive Advantage in Explaining

Comparative Advantage

Comparative Advantage

11 1 | í 1 I i I = 1 · Students must be able to differentiate between absolute advantage and comparative advantage. Comparative advantage is the key to specialization and trade.

11 1 | í 1 I i I = 1 · Students must be able to differentiate between absolute advantage and comparative advantage. Comparative advantage is the key to specialization and trade.

Chapter Comparative Advantage: The Basis for Exchangefaculty.arts.ubc.ca/slemche/academic_f10/webfiles_f10/ch2_3ed.pdf · systems based on specialization and the exchange of goods

Chapter Comparative Advantage: The Basis for Exchangefaculty.arts.ubc.ca/slemche/academic_f10/webfiles_f10/ch2_3ed.pdf · systems based on specialization and the exchange of goods

4757_11. Comparative Advantage

4757_11. Comparative Advantage

The Comparative Advantage of Medicare Advantage · THE COMPARATIVE ADVANTAGE OF MEDICARE ADVANTAGE ... The Comparative Advantage of Medicare Advantage ... Azevedo and Gottlieb 2017;

The Comparative Advantage of Medicare Advantage · THE COMPARATIVE ADVANTAGE OF MEDICARE ADVANTAGE ... The Comparative Advantage of Medicare Advantage ... Azevedo and Gottlieb 2017;

SPECIALIZATION AND COMPARATIVE ADVANTAGE CHAPTER 5.

SPECIALIZATION AND COMPARATIVE ADVANTAGE CHAPTER 5.

Absolute and Comparative Advantage: Ricardian Model · PDF fileAbsolute and Comparative Advantage: Ricardian Model ... Comparative Advantage If a country or indi- ... side this range?

Absolute and Comparative Advantage: Ricardian Model · PDF fileAbsolute and Comparative Advantage: Ricardian Model ... Comparative Advantage If a country or indi- ... side this range?