What is meant by comparative advantage in trade?

Comparative advantage is where countries stick to what they are best at producing and trade those goods with each other. It does not matter if one country is worse at making, say, bread, than the country it is trading with - but that if bread is what it is good at producing then it should make this and trade its bread abroad. Likewise, the other country should produce only what it is best at producing. [This can be shown through a diagram with two countries producing two goods. To demonstrate this, I will require the whiteboard feature.]

Answered by Callum R. Economics tutor

1715 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain a policy that may reduce inequality in the United Kingdom


Explain the main reasons for government spending


How can a PPF curve be used to show opportunity cost?


Evaluate relative merits of monetary and fiscal policy measures for governments wanting reduced unemployment in the UK. (20 marks)


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences