When a country changes from agricultural to industrial, how can it affect the comparative advantage of that country? How will it change the comparative advantage of the country?
When a country changes from agricultural to industrial, how can it affect the
How will it change the comparative advantage of the country?
The theory of comparative advantage was given by David Ricardo. According to David Ricardo gains from international trade should not be limited to the situation of absolute advantage.
The contribution of Ricardo was to show how two countries can gain through international trade if one country has an absolute advantage in producing both the products.
Comparative advantage means producing that good in which a country is more efficient. A country should produce that good in which it is more efficient and let other countries produce that good in which that country is efficient in this way the total output would be more.
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