What Is the Law of Comparative Advantage?
The law of comparative advantage states that a country should specialize in the production and export of goods that the country can produce at relatively low costs, and import those goods that have relatively high production costs. This shows that it is comparative advantage, not absolute advantage, that affects the trade pattern.
Law of comparative advantage
Right!
- Chinese name
- Law of comparative advantage
- main effect
- More conducive to achieving system goals
- Point out
- Can be produced at relatively low cost
- No
- Absolute advantage is affecting trade patterns
- The law of comparative advantage states that a country should specialize in the production and export of goods that the country can produce at relatively low cost, and import those goods that have relatively high production costs. This shows that it is comparative advantage, not absolute advantage, that affects the trade pattern.
- The main function of the law of comparative advantage is to allow people to choose and practice and think in a way that is more conducive to achieving the goals of the system.