Scribd Logo
Upload

Welcome to Scribd!

  • IE Notes (24-01-22)

    Uploaded by

    Uma Zooma
    6 views3 pages
    1. Comparative advantage theory states that countries will specialize in producing and exporting goods that they can produce at a lower relative cost than other countries. 2. Due to differences in factors like climate, resources, and geography, countries have comparative advantages in different industries and commodities. 3. When countries trade based on their comparative advantages, both countries can gain by importing goods that are comparatively more costly to produce domestically and exporting goods that have a comparative cost advantage.

    Original Description:

    Original Title

    IE notes (24-01-22)

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    1. Comparative advantage theory states that countries will specialize in producing and exporting goods that they can produce at a lower relative cost than other countries. 2. Due to differences in factors like climate, resources, and geography, countries have comparative advantages in different industries and commodities. 3. When countries trade based on their comparative advantages, both countries can gain by importing goods that are comparatively more costly to produce domestically and exporting goods that have a comparative cost advantage.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    6 views3 pages

    IE Notes (24-01-22)

    Uploaded by

    Uma Zooma
    1. Comparative advantage theory states that countries will specialize in producing and exporting goods that they can produce at a lower relative cost than other countries. 2. Due to differences in factors like climate, resources, and geography, countries have comparative advantages in different industries and commodities. 3. When countries trade based on their comparative advantages, both countries can gain by importing goods that are comparatively more costly to produce domestically and exporting goods that have a comparative cost advantage.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 3

    ce Recardo theoy Cornparattve Azwantag9/

    Compaaive Daerens Cost.

    its net Abs otut


    Aceedimg t Ooutd Ricando,
    DAernences in Cos
    brut tkk Companatfve
    betwean
    thout eFesnmine tnade e l a t o n
    two counbus.
    in ceuntuis becaue
    Puoduchian cost als dibtens and
    du'uason dabwr
    egeoMaphta
    Speciuzaten Pucu cion.
    cnmate, Noturol Resources
    Due to ipberen ces
    and elgienay dobeUn
    Gengnahical 'euation commodi bg Ct a
    a County Can oduce one

    w e r Cost than th
    he 0tthar. Om h s way
    in the pnooluuch'an
    ach counhy specsluzes
    ok that commedil shich its compan attve
    o Puoducton. es
    he Least.
    "

    Cst e
    4nto trade
    Thueu,
    hen a caunty entes
    counby, iE uull enpout
    which compan atve
    hose Commodites
    *hase
    oundd wil imp ant
    Pubduchon cost a e s
    shicA a cemaarnahve-
    #hese cemmootun'es
    these
    PuOdu Ch an cests an hugh
    Ihis is he Bosis Dntennoh'enaU Thad
    Tmade
    accod'mg to
    to bnid ecando
    Comp anat've Aowantoge
    Export
    Companattve Dakadwahtege at lead
    Impont Lecs
    Specitic Conceen abouk- kabaun Cost Pucduth
    ef Praln
    Ihis th eouy du' vdes the cest of phodu ction
    dhenencebewen he coundues ehto
    ue Kimds t-

    Pbsoute Cost Dfhernence


    Cased o
    & Eq ual Cost Dlenarnces
    Produchisen
    3.
    3 Companatative Cost D4Herencesj Cost
    heny
    heay
    ef Compauahve Ahvarbye
    15 Assuumpk'ons
    and
    wo Countuis C o u n t y A'
    hue
    h e ane

    Cunby B'.
    Commoditis,
    Same two
    Puooluce he
    2 Thuy ounlu
    Counkis
    n bath the
    &mitan tasle
    3. hen hace
    chn
    4dabowrs the only taeton wdu
    5 The Sapply elabow is Cncharged.
    6 Au units labaun omogeneous
    Prui'ces t u o cemmodits ane dtenminaa
    by kabowr cost
    au Paoduceo under the aw
    Commodites
    8 Congt ant cost

    Knoniledge
    es dnchanges
    Technotogical
    on he
    he counues take place
    Juaale 6w
    basis o Bonten Austem.
    Perhectly mobila a
    Puooluction
    Factou ho immobile b/w
    hi O county but are
    ha courtues
    hi toudy
    1 Fru Tnade b/uw
    e ayrg
    TMode
    Tode
    cosk
    transpout
    No mwoluwed

    employe
    AL octers
    Puoduuckon
    are
    tuly
    14 both the cowilnies.

    ontesuratonal Maukat perfeck.


    15

    You might also like