comparative advantage

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Title: comparative advantage

Essay Details:

Subject: Miscellaneous

Author: Stephanie W

Date: August 29, 2015

Level: University

Grade: B

Length: 4 / 939

Essay text:

The goods being produced are cloth and wine. Ricardo assumed that Portugal was more productive in producing the two goods. Ricardo then went on to explain that if England specialized in producing one of the two goods, and if Portugal produced the other, then the total output of the world would rise. The countries should choose the product that they want to specialize in by which country had a comparative advantage in production. In order to identify a country's comparative advantage good, requires the opportunity cost to be identified. Opportunity Cost refers to the "single most valuable opportunity given up when a choice is made, the opportunity cost is your next best alternative or your trade off"(www...

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