Does China have an absolute or comparative advantage?

Does China have an absolute or comparative advantage?

Absolute advantage differs from comparative advantage, which refers to the ability of a country to produce specific goods at a lower opportunity cost. China can produce such goods more efficiently, which gives it an absolute advantage relative to many countries.

Which country has an absolute advantage in the production of soybeans Why?

The USA

How does the United States have a comparative advantage over China?

A contemporary example: China’s comparative advantage with the United States is in the form of cheap labor. Chinese workers produce simple consumer goods at a much lower opportunity cost. The United States’ comparative advantage is in specialized, capital-intensive labor.

Does the US have a trade deficit or surplus with China?

U.S. trade deficit surges to record; shortfall with China keeps rising. The U.S. trade imbalance jumped to a record $74.4 billion in March. The deficit with China increased 22%, while the shortfall with Mexico rose 23.5%. Surging demand for foreign-made goods is pushing the shortfall.

Which country has the absolute advantage in producing freezers please explain why?

 Germany Therefore, Germany has an absolute advantage in the production of both freezers and dishwashers, simply because they can produce more than Italy. 7  A country is said to have a comparative advantage in whichever good has the lowest opportunity cost.

How do you do absolute advantage?

To calculate absolute advantage, look at the larger of the numbers for each product. One worker in Canada can produce more lumber (40 tons versus 30 tons), so Canada has the absolute advantage in lumber. One worker in Venezuela can produce 60 barrels of oil compared to a worker in Canada who can produce only 20.

What is absolute advantage and how is it related to resource use quizlet?

Absolute advantage focuses on who uses the fewest resources, but comparative advantage focuses on what else those resources could produce, that is, on the opportunity cost of those resources.

What are the limitations of the absolute advantage theory?

Another disadvantage is that focusing all of a country’s production on a single good is unrealistic and potentially dangerous. While a region may have an absolute advantage at manufacturing a product, if that product isn’t in high demand, focusing all of its resources on making it is a bad idea.