European companies have invested heavily in manufacturing technologies to create or preserve their comparative advantage in the production of such things as turbines.13 In contrast, U.S. companies have exploited the comparative advantage of producing abroad, locating newer plants overseas and outsourcing jobs to countries with lower labor costs. Discuss the relative merits of the European versus United States approach to global competition in terms of

(1) maximizing the country’s well-being in the short-run and (2) in the long-run. Which approach do you think puts investment dollars to their highest valued use? Explain your answer.