Economics Part A

Comparative Advantage Explained With an Illustration

Using currency to express the price of a specific item simplifies all calculations. If Country A mnufactures a car at a cost of $10,000, and Country B makes the same car for $5,000, it is obvious that the price of the car in Country B is likely to be cheaper, and that Country B has a comparative advantage over Country A in terms of producing cars.

Comparative Advantage Explained With an Illustration591Comparative Advantage Explained With an Illustration