International Trade Concepts Absolute and Comparative Advantage Essay

Open, View, and/or
Download this Document

Total Length: 557 words ( 2 double-spaced pages)

Total Sources: 1

Page 1 of 2

International Trade Concepts

Absolute and Comparative Advantage

Absolute Advantage

An absolute advantage is achieved when one country can produce a product at a lower cost than any other country, potentially gaining absolute control of the market for that good or service. Absolute advantage provides a country with leverage in international trade as it builds assets or wealth. Absolute advantage's can have a finite life as circumstances change. In the past French wine held absolute advantage, but recently, U.S., Australian, and New Zealand wines have started to become very competitive relative to French wines. In the United States, Ford Motor Company held absolute advantage, then General Motors, and finally other U.S. companies and foreign imports moved into the market. Absolute advantages are rare today, however some countries manage to approximate absolute advantages in some products. Climate differences can give some nations or regions an advantage in growing certain plants.

Stuck Writing Your "International Trade Concepts Absolute and Comparative Advantage" Essay?

View All Our Example International Trade Concepts Absolute and Comparative Advantage Essay

Have A Custom Example Essay Written

Saffron is perhaps the world's most expensive spice at around $40 dollars an ounce. It is native to the Mediterranean, Asia Minor, and India. Today saffron is cultivated primarily in Spain, where the plant thrives in its soil and climate. Attempts to grow Saffron in other parts of the world have generally been unsuccessful (National American University, 2009).

Comparative Advantage

A comparative advantage is achieved when one country or business can produce a specific product at lower cost than another country. Countries tend to export goods with comparative advantage to gain market share for that good or service. Producing or exporting goods in which a country has comparative or absolute advantage efficiently facilitates trade as it increases interdependence. Producing only those goods that can gain comparative advantage leaves a country….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"International Trade Concepts Absolute And Comparative Advantage" (2011, July 16) Retrieved April 29, 2025, from
https://www.aceyourpaper.com/essays/international-trade-concepts-absolute-comparative-51520

Latest MLA Format (8th edition)

Copy Reference
"International Trade Concepts Absolute And Comparative Advantage" 16 July 2011. Web.29 April. 2025. <
https://www.aceyourpaper.com/essays/international-trade-concepts-absolute-comparative-51520>

Latest Chicago Format (16th edition)

Copy Reference
"International Trade Concepts Absolute And Comparative Advantage", 16 July 2011, Accessed.29 April. 2025,
https://www.aceyourpaper.com/essays/international-trade-concepts-absolute-comparative-51520
   

Open, View, and/or
Download this Document
order custom essay example