Word Trade

Question 1: Discuss some sources of comparative advantages. laughingstock example for each. Page 411 There are three main(prenominal) sources of comparative advantage. They are global unlikenesss in climate, international differences in constituent endowments, and international differences in technology. First are the differences in climate. In general, the differences in climate are a large source of international trade. For example, tropical countries export tropical products similar coffee, sugar, and bananas. In contrast, countries in the temperate zones export crops like chaff and corn. Some trade is even driven by the difference in seasons between the northern and southern hemispheres. For instance, winter deliveries of Chilean grapes and New Zealand apples hit become commonplace in U.S and European supermarkets. Second, it is the differences in operator endowments. Factor endowment is commonly dumb as the amount of land, labor, and capital that a country possesses and can exploit for manufacturing. Countries with a large endowment of resources tend to be more prosperous than those with a small endowment, all opposite things being equal. The relationship between comparative advantage and factor availability is found in an influential model of international trade, the Heckscher-Ohlin model.

A key concept in the model is factor intensity. The factor intensity of production of a sizeable is a measure of which factor is utilisationd in relatively great quantities than other factors in production. For example, at any given hire rate and rental rate of capital, oil refining is capital-intensive because it tends to use a high dimension of capital to labor, but garb manufacture is labor-intensive because it tends to use a high ratio of labor to capital. According to the Heckscher-Ohlin model, a country will have a comparative advantage in a good whose production is intensive in the factors that are abundantly uncommitted in that country. So a country that has... If you want to occupy a full essay, order it on our website: Ordercustompaper.com

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