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Topic: Absolute advantage

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	Comparative advantage - Wikipedia, the free encyclopedia
		What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different goods.
		Comparative advantage was first described by Robert Torrens in 1815 in an essay on the corn trade.
		According to comparative, not absolute advantage: the young man must spend more time on the tasks in which he is much better and the old man must concentrate on the tasks in which he is only a little worse.
	en.wikipedia.org /wiki/Comparative_advantage (1901 words)

	The Theory of Comparative Advantage - Overview
		Secondly, the theory is easy to confuse with another notion about advantageous trade, known in trade theory as the theory of absolute advantage.
		Advantageous trade based on comparative advantage, then, covers a larger set of circumstances while still including the case of absolute advantage and hence is a more general theory.
		If one country has an absolute advantage in the production of both goods (as assumed by Ricardo) then real wages of workers (i.e., the purchasing power of wages) in that country will be higher in both industries compared to wages in the other country.
	internationalecon.com /v1.0/ch40/40c000.html (3377 words)

	Tutor2u Discussion Forum - comparative and absolute advantage
		Absolute advantage is where country A can produce Good X in greater quantities than COuntry B can.
		But, comparitive advantage is where coubtry B can produce an extra unit of Good Y without having to forgo as much X (ie it can produce more Y as a percentage of X than country A can).
		In other words, comparitive advantage is to do with opportunity costs and effecience, where Absolute Advantagfe is to do with how many resources an conomy has, regardless of how efficiently they are used.
	www.tutor2u.net /forum/topic.asp?TOPIC_ID=17577 (236 words)

	Definitions: Absolute and Comparative Advantage
		A country has an absolute advantage in the production of a good relative to another country if it can produce the good at lower cost or with higher productivity.
		This also means that if the US has a comparative advantage in one of the two goods, France must have the comparative advantage in the other good.
		It is not possible for one country to have the comparative advantage in both of the goods produced.
	internationalecon.com /v1.0/ch40/40c090.html (1061 words)

	Comparative Advantage, Economics by Topic: Library of Economics and Liberty
		Someone may have an absolute advantage at producing every single thing, but he has a comparative advantage at many fewer things, and probably only one or two things.
		If one of the countries can produce one of the commodities with peculiar advantages, and the other the other with peculiar advantages, the motive is immediately apparent which should induce each to confine itself to the commodity which it has peculiar advantages for producing.
		If the exchange, however, was made in this manner, the whole of the advantage would be on the part of England; and Poland would gain nothing, paying as much for the cloth she received from England, as the cost of producing it for herself.
	www.econlib.org /library/Topics/Details/comparativeadvantage.html (1699 words)

	E111RCh21-Comparative Advantage and International Trade
		absolute advantage in both goods and a comparative advantage in both goods.
		absolute advantage in both goods and a comparative advantage in neither good.
		absolute advantage in both goods and a comparative advantage only in aircraft.
	employees.oneonta.edu /beckei/E111RChap21.html (887 words)

	Mises Economics Blog: comparative advantage versus absolute advantage (Site not responding. Last check: 2007-11-02)
		At first glance, there is no reason to think that A, with absolute advantage against B in goods X and Y, would wish to trade either X or Y with B. Another worry is that if B trades in either X or Y with A, he might harm his interests.
		It is not absolute advantage that is relevant when considering the gains to trade -- it is comparative advantage.
		While the law of comparative advantage was explicated and the benefits of free trade explained by Ricardo under a certain set of assumptions (mobility of labor, but not of trade) does not imply that the law of comparative advantage depends upon those assumptions -- it does not.
	blog.mises.org /archives/003386.asp (2046 words)

	Clarifications on the Case for Free Trade - Mises Institute (Site not responding. Last check: 2007-11-02)
		He said that if Portugal specialized in wine, where its absolute advantage was greatest, and England specialized in cloth, where its disadvantage was least, total output would be higher than if both countries achieved self-sufficiency by producing both products.
		Nevertheless, the flow of factors of production to absolute advantage in place of comparative advantage vitiates the case for free trade--that it produces mutual gains to the countries involved.
		What we may be witnessing is global capitalism destroying national sovereignties, leading to a global government, much as Marx described capitalism’s role in the overthrow of feudalism and the rise of the nation-state.
	www.mises.org /fullstory.aspx?control=1420&id=65 (2491 words)

	ABSOLUTE ADVANTAGE
		He took that a country is able to produce larger output by a given same composite quantity of inputs (land, labor capital, enterprise) as contrasted to the trading partner where exactly the same composite amount of inputs (land labor, capital, enterprise) may produce lesser amount of output.
		He did not however deal with the situation of the trading partners who did not have the absolute advantage as to why they will ever like to enter the transaction.
		conditions of absolute advantage however, are very important in economics.
	members.aol.com /jimkhwaja/economic/trade/absolute.htm (231 words)

	Absolute advantage: A Glossary of Political Economy Terms - Dr. Paul M. Johnson
		Absolute advantage: A Glossary of Political Economy Terms - Dr. Paul M. Johnson
		The ability of an economic actor (an individual, a household or a firm) to produce some particular good or service with a smaller total input of economic resources (labor, capital, land, etc.) per unit of output than other economic actors.
		comparative advantage, since it is comparative advantage that determines the potential welfare gains from specialization and trade, and not absolute advantage.
	www.auburn.edu /~johnspm/gloss/absolute_advantage.html (114 words)

	Comparative Advantage: Archive Entry From Brad DeLong's Webjournal
		It is important in assessing comparative advantage that "efficiency" be defined in its broadest possible sense.
		Allocation by absolute advantage means according to the relative return in this country vs. the others.
		I believe that definition is incorrect because a country can have a comparative advantage in something that is less efficient than the average efficiency level of its own country, just because other country is relatively more efficient in the things we are best doing.
	www.j-bradford-delong.net /movable_type/archives/000129.html (1427 words)

	Comparative and Absolute Advantage [ Biz/ed Virtual Developing Country ] (Site not responding. Last check: 2007-11-02)
		A country has an absolute advantage over it trading partners if it is able to produce more of a good or service with the same amount of resources or the same amount of a good or service with fewer resources.
		It is easy to see that if countries have an absolute advantage there are advantages to trade.
		Some countries have an absolute advantage in the production of many goods relative to their trading partners.
	www.bized.ac.uk /virtual/dc/trade/theory/th2.htm (573 words)

	Comparative Advantage
		We mentioned that the concept of absolute advantage seems to imply that entities (countries, corporations, people) ought to seek economic opportunities where they have absolute advantages over competitors (e.g., through obtaining a monopoly).
		Ricardo's theory has the crucially important result that even when a nation does not have an absolute advantage in the production of particular goods or services with another nation, it can still be in the self-interest of that nation to engage in international trade.
		Ricardo's theory is also important because it encourages nations to specialize in specific areas, and developing countries need to have a reliable theory that will guide them in finding the appropriate areas of specialization.
	www.mindtools.net /GlobCourse/compareadv.shtml (746 words)

	Economics Interactive
		A country, individual, or firm has an absolute advantage in producing a good if production of the good absorbs fewer resources (or less time, in the case of an individual) than are required in other countries or by other individuals or firms.
		People are absolutely impoverished if the minimum amounts of food, clothing and shelter necessary for survival absorb all of their income, and they live a razor’s edge existence.
		Goods or resources are described as abundant (absolutely) when perceived as neither especially scarce (high quantity) nor especially valuable (relatively low price – and they may even be “free”).
	www.unc.edu /depts/econ/byrns_web/Economicae/EconomicaeA.htm (4061 words)

	Comparative advantage - Trade Encyclopedia (Site not responding. Last check: 2007-11-02)
		When one entity (be it a firm or a country) is able to produce more efficiently than another entity it has an absolute advantage; that is, assuming equal inputs, the entity with an absolute advantage will have a greater output.
		Ultimately, Northland must pay for this imported wine somehow, and since clothing can be produced relatively more easily, clothes will be exported back to Southland.
		Wine will be a more profitable export than clothes for Southland as this comparative advantage in productivity is maintained, so it would be rational for Southlanders to deploy more resources into the wine industry at the expense of the clothes industry.
	www.bestbuy.tiptophot.com /trade/index.php?title=Comparative_advantage (1253 words)

	Ricardo - David
		David Ricardo, working in the early part of the 19th century, realised that absolute advantage was a limited case of a more general theory.
		Because relative or comparative costs differ, it will still be mutually advantageous for both countries to trade even though Portugal has an absolute advantage in both commodities.
		His other great contribution, the law of comparative cost, or comparative advantage, demonstrated the benefits of international specialisation of the commodity composition of international trade.
	iang.org /free_banking/david.html (944 words)

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	www.absoluteadvantage.com (259 words)

	Absolute Advantage Theory (Smith, 1776)
		The U.S. has an absolute advantage in producing wheat while Columbia has an absolute advantage in producing coffee.
		Germany has an absolute advantage in both wheat and wine production.
		The Balance of Payment (BOP) is defined as a record of all economic transactions between residents of a country and residents of all other countries that trade with that nation.
	grail.cba.csuohio.edu /~vipioche/63212001.html (525 words)

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	www.janmelnik.com (527 words)

	Absolute Advantage (Site not responding. Last check: 2007-11-02)
		According to Adam Smith, a country’s wealth is based on its available goods and services rather than on gold
		Natural advantage refers to climate and natural resources
		Acquired advantage refers to technology and skill development
	www.humboldt.edu /~sm5/ba410/slides/ba410/05win/sld004.htm (35 words)

	absolute advantage Definition
		The name for the ability of one entity to engage in more efficient production than another entity.
		Assuming equal inputs, the entity with an absolute advantage will have a greater output.
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	www.investorwords.com /5389/absolute_advantage.html (163 words)

	Search Tuna Report for comparative advantage (Site not responding. Last check: 2007-11-02)
		The general industry of the country, being always in proportion to the capital which employs it, will not therby be diminished...
		The Basic Theory Of Comparative Advantage Was Developed By David Ricardo Ricardo's Theory Of Comparative Advantage Was Further Developed By Heckscher, Ohlin And Samuelson Who Argued That Countries Have Different Factor Endowments Of Labour, Land And Capital Inputs....
		EconLog, Comparative Advantage 2002-06 Library Of Economics And...
	www.searchtuna.com /ftlive2/1312.html (1827 words)

	Mises Economics Blog: The Absolute Advantage Question
		Paul Craig Roberts submits that a country will be hurt by free trade if another country has an absolute advantage and there is total mobility of factors of production.
		To simplify the issue, if Country A has an absolute advantage over Country B, Country B simply has to lower the wage rates to compete. Of course, since Country B is producing the same quantity of goods as it produced before, only wages changed, it's wealth has not really changed.
		Never ceases to amaze me how often people choose to ignore the Law of supply and...
	blog.mises.org /archives/001399.asp (484 words)

	Absolute Advantage International Trade Terms and Definition information. (Site not responding. Last check: 2007-11-02)
		Absolute Advantage International Trade Terms and Definition information.
		Home >> International Trade Terms >> Absolute Advantage
		An advantage of one nation or area over another in the costs of producing an item in terms of used resources.
	www.trncwashdc.org /TradeTerms2-3-.html (74 words)

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