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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. 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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  1. Reasons for Trade: Absolute & Comparative Advantage

  2. Reasons for Trade: Examples of Absolute and Comparative Advantage Table 1: Production of hardware and software products by Utopia and Happyland

  3. Happyland’s absolute advantage Table 1: Production of hardware and software products by Utopia and Happyland

  4. Utopia’s absolute advantage Table 1: Production of hardware and software products by Utopia and Happyland

  5. PPCs

  6. Utopia’s comparative advantage 1 unit Hardware = 15 units Software 1 unit Hardware = 5 units Software

  7. Happyland’s comparative advantage 1 unit Software = 0.06 units Hardware 1 unit Software = 0.2 units Hardware

  8. 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

  9. 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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