Question

Write a 4-5 line summary in which you explain how comparative advantage is used to determine which goods and services will be traded. Create an example to explain the concept.
Make it unpunctual and like 10th graders work

Answer 1

Comparative advantage is when a country can produce a good or service at a lower opportunity cost than another country. This means that countries will trade goods in which they have a relative efficiency. For example, if Country A can produce coffee more efficiently than wheat, while Country B can produce wheat more efficiently than coffee, they will trade. So, Country A focuses on coffee and Country B focuses on wheat, benefiting both through trade.