Absolute and Comparative Advantage
INTRO
The key to trade no matter if it is among people, or a country is specialization.
If you specialize in one thing then you can easily become better than others at it.
If you want to find out what a country specialization is then you should look at their exports.
THE US AND INTERNATIONAL TRADE
Imports are the goods and services a country buys from another
The US in 2003 bought so much from other countries it spent over 1.5 trillion dollars.
If International Trade did not exist then many products would be unavailable to a country and would hurt you economically.
THE BASIS FOR TRADE
The Basis for trade involves Absolute Advantage, and Comparative Advantage
Absolute Advantage is when a country can produce a product more efficiently then others
Comparative Advantage is the ability to produce a product relatively more efficient then other countries.
The key to trade no matter if it is among people, or a country is specialization.
If you specialize in one thing then you can easily become better than others at it.
If you want to find out what a country specialization is then you should look at their exports.
THE US AND INTERNATIONAL TRADE
Imports are the goods and services a country buys from another
The US in 2003 bought so much from other countries it spent over 1.5 trillion dollars.
If International Trade did not exist then many products would be unavailable to a country and would hurt you economically.
THE BASIS FOR TRADE
The Basis for trade involves Absolute Advantage, and Comparative Advantage
Absolute Advantage is when a country can produce a product more efficiently then others
Comparative Advantage is the ability to produce a product relatively more efficient then other countries.