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This paper examines the concept of comparative advantage. It further uses the example of how autos can be manufactured in Detroit but also traded for Iowa corn. The theory behind trade is also examined in-depth.
From the Paper:"Trade is based on specialization and specialization is based on comparative advantage. One country might be more efficient at producing a particular good-such as automobiles-than other countries. Other countries might be efficient at producing different goods-perhaps including corn-than their neighbors. By each country specializing in that which they do most efficiently and then trading with one another all countries are better off. This theory is behind local, regional and international trade and builds on the concept of absolute and comparative advantage. This research considers..."
Cite this Term Paper:
Comparative Advantage (2008, December 01) Retrieved November 28, 2020, from https://www.academon.com/term-paper/comparative-advantage-122216/
"Comparative Advantage" 01 December 2008. Web. 28 November. 2020. <https://www.academon.com/term-paper/comparative-advantage-122216/>