--%>
Assignment Help - homework help

What is the basic principle of comparative advantage

What is the basic principle of comparative advantage?

E

Expert

Verified

The basic principle of comparative advantage was first observed and explained in early 1800s by David Ricardo. This principle says that it pays for a person or a country to specialize and exchange even if that person or nation is more productive than potential trading partners in all economic activities.  Specialization should take place if there are relative cost differences in production of different items.

   Related Questions in Business Economics

  • Q : Contestable Markets The least probable

    The least probable of the given industries to be a contestable market is: (1) video rentals. (2) pizza delivery. (3) cable television. (4) trucking. Can someone explain/help me with best solution about problem of <

    		•
  • Q : Specialization and trade according to

    Not between concepts explained in Adam Smith’s Wealth of Nations was the conception which net benefits occur from: (1) specialization and trade according to comparative advantage. (2) the division of labor in production processes. (3) reliance o

    		•
  • Q : Married men on average earn more income

    Studies indicate that married men on average earn more income than unmarried men of the same age?

    		•
  • Q : Demand supply Newspaper item: “Due to

    Newspaper item: “Due to lower grain prices, consumers can expect retail prices of choice beef to begin dropping slightly this spring with pork becoming cheaper after midsummer,” the Agriculture Department predicted. “This reflects increasing supply,” the department said. Does the statement use th

    		•
  • Q : Competition is the essential despot of

    Evaluate and explain the statements: “Competition is the essential despot of the market economy”.

    		•
  • Q : Independent queue vs. pooled queue

    Instruction: McDonald's vs. Burger King - these two fast food chains use different waiting line design: Independent queue vs. pooled queue. To compare the two different queue systems on equal footing, let's assume that we pick a McDonald's sto

    		•
  • Q : Elucidate reallocation of resources

    Elucidate reallocation of resources?

    		•
  • Q : Explain Self-interest of the Market

    Explain Self-interest of the Market System?

    		•
  • Q : Demand Q X= 600- 6PX + 20I +0.4PY c.

    Q X= 600- 6PX + 20I +0.4PY c. Suppose PX increases by 10%, by what percentage would sales decrease? Explain how this price increase affect total revenues from good X.

    		•
  • Q : Explain of the law of demand Explain of

    Explain of the law of demand?

    		•