{"id":3933,"date":"2015-12-04T16:21:53","date_gmt":"2015-12-04T16:21:53","guid":{"rendered":"https:\/\/courses.candelalearning.com\/macroxwaymakerxspring2016\/?post_type=chapter&p=3933"},"modified":"2018-05-02T19:55:41","modified_gmt":"2018-05-02T19:55:41","slug":"introduction-to-comparative-advantage","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/oldwestbury-wm-macroeconomics\/chapter\/introduction-to-comparative-advantage\/","title":{"raw":"Introduction to Comparative Advantage","rendered":"Introduction to Comparative Advantage"},"content":{"raw":"

What you\u2019ll learn to do: define and calculate comparative advantage, and understand how countries choose which goods and services to trade internationally<\/h2>\r\n\"Basket<\/a>\r\n\r\nPeople trade for goods and services if they can buy them more cheaply than they could make them themselves. This is true whether you\u2019re buying produce from the grocery store or imported chocolate from another country.\r\n\r\nWe live in a global marketplace. The food on your table might include fresh fruit from Chile, cheese from France, and bottled water from Scotland. Your wireless phone might have been made in Taiwan or Korea. The clothes you wear might be designed in Italy and manufactured in China. The toys you give to a child might have come from India. The car you drive might come from Japan, Germany, or Korea. The gasoline in the tank might be refined from crude oil from Saudi Arabia, Mexico, or Nigeria. As a worker, if your job is involved with farming, machinery, airplanes, cars, scientific instruments, or many other technology-related industries, the odds are good that a hearty proportion of the sales of your employer\u2014and hence the money that pays your salary\u2014comes from export sales. We are all linked by international trade, and the volume of that trade has grown dramatically in the last few decades.\r\n\r\nIn this section, you will learn about the basics behind international trade, what determines the costs of imports and exports,\u00a0and why it is advantageous for countries to specialize in the production of particular\u00a0goods or services.","rendered":"

What you\u2019ll learn to do: define and calculate comparative advantage, and understand how countries choose which goods and services to trade internationally<\/h2>\n

\"Basket<\/a><\/p>\n

People trade for goods and services if they can buy them more cheaply than they could make them themselves. This is true whether you\u2019re buying produce from the grocery store or imported chocolate from another country.<\/p>\n

We live in a global marketplace. The food on your table might include fresh fruit from Chile, cheese from France, and bottled water from Scotland. Your wireless phone might have been made in Taiwan or Korea. The clothes you wear might be designed in Italy and manufactured in China. The toys you give to a child might have come from India. The car you drive might come from Japan, Germany, or Korea. The gasoline in the tank might be refined from crude oil from Saudi Arabia, Mexico, or Nigeria. As a worker, if your job is involved with farming, machinery, airplanes, cars, scientific instruments, or many other technology-related industries, the odds are good that a hearty proportion of the sales of your employer\u2014and hence the money that pays your salary\u2014comes from export sales. We are all linked by international trade, and the volume of that trade has grown dramatically in the last few decades.<\/p>\n

In this section, you will learn about the basics behind international trade, what determines the costs of imports and exports,\u00a0and why it is advantageous for countries to specialize in the production of particular\u00a0goods or services.<\/p>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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CC licensed content, Original<\/div>