Comparative Advantage



What’s comparative benefit? And why is it noteceable to industry? This video guides us thru a selected instance condition Tasmania — an island off the coast of Australia that skilled the surprise of enlargement in opposite. Thru this situation we display what can occur when a civilization is disadvantaged of industry, and display why industry is very important to economic expansion.

In an financial system with a better collection of members buying and selling items and products and services, there are extra tactics to discover a comparative benefit and earn extra by means of growing probably the most price for others. Let’s dive proper in with an instance from our unused pals, Bob and Ann.

Microeconomics Direction: http://bit.ly/20VablY

Nearest video: http://bit.ly/21gU5IU

Backup us caption & translate this video!

http://amara.org/v/GLJf/

source

36 thoughts on “Comparative Advantage”

  1. There's one thing that has been perplexing me about how comparative advantage is used to justify free trade. All of the explanations for why country B that is worse at everything than country A, should still engage in exercising their comparative advantages seems to rest on the notion of cooperation and coordination in production. In other words, country A and country B should consult each other and coordinate production. However, without such deliberation and agreement, what signals help allocate production other than price? I've been looking but as of yet I've not found countries that coordinate, cooperate in their production in order to expand their production possibility frontier. The only example that I've seen are in Latin American countries through associations based on coordination and cooperation such as ALBA ( Alliance for the Peoples of Our America or the Bolivarian Alliance for the Peoples of Our America) that deliberately follow a non-FTA approach.
    I'd posit to say that in most developed countries, production is not to maximize the PPF but for production's purpose itself (i.e. to generate profits).

Leave a Comment

Your email address will not be published. Required fields are marked *