the domestic price, increasing consumption and … of oil mean that the Middle East has a comparative advantage in oil pro-duction, so Middle Eastern nations export oil to the United States. a. The United States gives up the least to produce a bushel of corn, so it has a comparative advantage in corn production. In this example, there is symmetry between absolute and comparative advantage. Therefore, we should have a comparative advantage in things that are produced using a lot of educated people. The United States can produce either food or computers at a one-to-one trade off. Your answer is correct. A contemporary example: China’s comparative advantage with the United States is in the form of cheap labor. D.Mexico has an absolute and comparative advantage in shoes. As it turns out, America's manufacturing sector -far from withering in the face of foreign competition - is actually thriving. Here's where the notion of comparative advantage comes in. America's comparative advantage. In other words, if the United States chooses to produce another personal computer, it must give up one bushel of food. An example of comparative advantage in financial assets seems a bit more complicated, but the principle emerges nonetheless. Any investor who Does this fact mean that we should not … The rigorous way to answer this questions would be to calculate the cost of producing different goods and services in the United States and comparing it to similar costs of production across the world. We also have a lot of money that we can spend on capital goods. B.Mexico has a comparative advantage, and the United States has an absolute advantage in shoes. Chinese workers produce simple consumer goods at a much lower opportunity cost. While the balance of trade in goods is negative, the United States runs a large surplus in the trade in services, reflecting its global comparative advantage in this sector. A.The United States has an absolute and comparative advantage in shoes. C.There is not enough information to tell. That bushel of food is the United States' opportunity cost of producing another computer. The domestic supply-and-demand diagram below represents a product in which the United States does not have a comparative advantage. The United States is an abundance of the low priced labor which forces in the production of goods that are human and physical capital intensive with the division of global production as brings the higher global output and the development of new technology has a comparative advantage in the production processes that can make use of less skilled labor … On the other hand, the opportunity cost of a banana is 2/3 of a pound of rice in China and 1/2 of a pound of rice in the United States, and the United States has a comparative advantage in producing bananas. 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