If a Comparative Advantage Implies That a Country Can Produce

question 49

Essay

If a comparative advantage implies that a country can produce a product at a lower opportunity cost than another country then why do we see two countries often trading the same goods? For instance, for most agricultural products the U.S. has a comparative advantage. Japan, one of America's largest trading partners has a comparative advantage in the production of most economy cars. Explain what is going on here when we still see the U.S. exporting cars to Japan and the U.S. importing some foods from Japan.

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Definitions:

Exosystem

A socio-ecological model layer affecting a person indirectly, involving contexts or settings that do not include the person but still influence their experiences.

Microsystem

The immediate environment in which an individual personally interacts, such as family, school, or workplace, influencing development and socialization.

Ecological

Relating to or concerned with the relation of living organisms to one another and to their physical surroundings.

Environment

The surroundings or conditions in which a person, plant, or animal lives or operates.