Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
The United States has an absolute advantage when compared to both Romania and South Africa. As it takes less worker hours to produce each resource. This is most likely due to the abundant amount of resources the US has when compared to the countries in these specific resources.
The United States also has a comparative advantage over South Africa, as it takes less additional workers hours to produce each resource. For example, it only takes (2) additional worker hours in order to produce corn and citrus, while it takes double that (4) for South Africa.
C. Most trade happens because of comparative advantage; this is due to the fact that some countries produce faster and more cost efficiently than others. Naturally the country with higher efficiency in a specific resourse will then specialize respectively. This is what trade depends on. This also benefits each country within the trade agreement, especially if both countries produce what the other needs. For example, since Ecuador has a higher comparative advantage in crude oil production than that of the US, in order to maximize efficiency it would be of benefit to both parties if a trade agreement was made.
Developing Country
Number of additional worker hours to produce one unit of citrus instead of one unit of corn
Corn
Citrus
8
10
Equal comparative advantage
to United States
Number of additional worker hours to produce one unit of citrus instead of one unit of corn
Computer Software
Apparel
Developed country
Equal comparative advantage
to United States
6
8
Citrus
Corn
Number of additional worker hours to produce one unit of citrus instead of one unit of corn
4
2
Higher comparative advantage
Number of additional worker hours to produce one unit of computer software instead of one unit apparel
Computer Software
Apparel
2
4
Equal comparative advantage
to Romania.
Developing Country
Number of additional worker hours to produce one unit of citrus instead of one unit of corn
Corn
Citrus
10
6
Higher comparative advantage
Number of additional worker hours to produce one unit of computer software instead of one unit of apparel.
Apparel
Computer Software
4
12
Higher comparative advantage