Paper Problem: Global Economics
Set up a Ricardo-type comparative advantage numerical example with two countries and two goods. Distinguish "absolute advantage" from "comparative advantage" in the context of your example. Then select an international terms-or-trade ratio and explain in some detail how trade between the two countries benefits each of them in comparison with autarky. When would either of your countries NOT benefit from engaging in trade? Explain.
Write a 2 to 3 pages paper in response to a case study or similar assignment provided by your professor. Student answers are to be clear, well-organized, and specific. Provide a concise, cogent argument and include details to support your response.
Assess comparative advantage and all related concepts such as opportunity costs, cost conditions, and the impact of trade on jobs. Explain how the sources of comparative advantage and related concepts such as economies of scale, theories and effects, and the product life cycle theory.
The response should include a reference list. Using one-inch margins, Times New Roman 12 pnt font, double-space and APA style of writing and citations.