Reasons for trade absolute comparative advantage
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Reasons for Trade: Absolute & Comparative Advantage PowerPoint PPT Presentation


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Reasons for Trade: Absolute & Comparative Advantage. Reasons for Trade: Examples of Absolute and Comparative Advantage. Table 1: Production of hardware and software products by Utopia and Happyland. Happyland’s absolute advantage.

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Reasons for Trade: Absolute & Comparative Advantage

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Reasons for trade absolute comparative advantage

Reasons for Trade: Absolute & Comparative Advantage


Reasons for trade examples of absolute and comparative advantage

Reasons for Trade: Examples of Absolute and Comparative Advantage

Table 1: Production of hardware and software products by Utopia and Happyland


Happyland s absolute advantage

Happyland’s absolute advantage

Table 1: Production of hardware and software products by Utopia and Happyland


Utopia s absolute advantage

Utopia’s absolute advantage

Table 1: Production of hardware and software products by Utopia and Happyland


Reasons for trade absolute comparative advantage

PPCs


Utopia s comparative advantage

Utopia’s comparative advantage

1 unit Hardware = 15 units Software

1 unit Hardware = 5 units Software


Happyland s comparative advantage

Happyland’s comparative advantage

1 unit Software = 0.06 units Hardware

1 unit Software = 0.2 units Hardware


Reasons for trade

Reasons for Trade

Before Specialization

A = 100 Hardware and 500 Software

After Specialization

B = 200 Hardware

After Trading 100 Hardware for 900 Software

C = 100 Hardware & 900 Software


Reason for tradce

Reason for Tradce

Before Specialization

X = 50 Hardware and 750 Software

After Specialization

Y = 1500 software

After Trading 750 Software for 83 Hardware

Z = 83 Hardware & 750 Software


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