Question
Assume that with one unit of production China can produce 20 TVs or 16 tons of iron-ore, while Australia can produce 12 TVs or 24
Assume that with one unit of production China can produce 20 TVs or 16 tons of iron-ore, while Australia can produce 12 TVs or 24 tons of iron-ore. Assume further that each country dedicates a total of 1000 units of production for TVs and iron-ore. Do you think there can be a scenario where one country (either China or Australia) can have both absolute advantage and comparative advantage?
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Yes it is possible for a country to have both absolute advantage and comparative advantage in different goods or industries Absolute advantage refers ...
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
13th edition
132743469, 978-0132743464
