Economics Comparative Advantage Questions
The role of comparative advantage in globalization is to drive specialization and trade between countries. Comparative advantage refers to the ability of a country to produce a good or service at a lower opportunity cost than another country. By focusing on producing goods or services in which they have a comparative advantage, countries can increase efficiency and productivity, leading to economic growth. This specialization allows countries to trade with one another, benefiting from the differences in their comparative advantages. Globalization, therefore, is facilitated by the concept of comparative advantage as it encourages countries to engage in international trade and exchange goods and services to maximize overall welfare.