Trade-Theory of Comparative Advantage
Due after 24 hours
Trade is a very important aspect in the positive growth of the world economy.
It has to be regulated so as to ensure that there is free flow of trade between
countries. For it to be possible certain considerations have to be taken into accounts
and models have been formulated to show this such as the Ricardian model and
The concept of
comparative advantage was first formulated by economist David Ricardo as an
explanation of the benefits of international trade for countries. His theory
concluded that a country could increase its income by specializing in certain
products and services and selling these on the international market.
700- to 950-word paper in which you explain the importance of international trade
and comparative advantage. Include the following:
The theory of
comparative advantage suggests that each country should narrowly focus its
a. Would such a policy imply that the
country should never diversify into new products?
b. Can a country know with certainty its
comparative advantage without experimenting with the production of new goods?
c. What are the implications for national
security of specialization?
Objectives and Expectation:
A. You will introduce the theory and address
each of the questions.
B. The assignment is to be a minimum of two
pages long (title pages, bibliographies, etc.) and in APA/MLA format.
C. A good variety of objective, high
quality, current sources need to be used.