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Social Studies skills: Difference between revisions
→Comparative Advantage
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* Definition: A particular economic advantage, resource or ability a country possesses over either its own other economic situations or those of another country. | * Definition: A particular economic advantage, resource or ability a country possesses over either its own other economic situations or those of another country. | ||
* Origin of the idea: | * Origin of the idea: | ||
** 1700s | ** late 1700s Scottish philosopher Adam Smith (1723-1790) | ||
click EXPAND for Adam Smith quoattion on comparative advantage: | |||
<div class="mw-collapsible mw-collapsed" style="width:50%"> | <div class="mw-collapsible mw-collapsed" style="width:50%"> | ||
<pre>“If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” (Book IV, Section ii, 12)''** Comparative advantage means concentrating on what your country is good at making/doing in order to get what other countries are better at making/doing."</pre></div> | <pre>“If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” (Book IV, Section ii, 12)''** Comparative advantage means concentrating on what your country is good at making/doing in order to get what other countries are better at making/doing."</pre></div> | ||
** early 19th century British economist David Ricardo *1772-1823)>> todo | |||
** Ricardo >> todo | * Examples: | ||
*** Is it advantageous for the U.S. to import oil from Saudi Arabia or to rely only on its own oil production? | |||
*** Is it advantageous for the U.S. to import oil from Saudi Arabia | |||
===Opportunity Cost=== | ===Opportunity Cost=== | ||