Discover millions of ebooks, audiobooks, and so much more with a free trial

Only $11.99/month after trial. Cancel anytime.

The Theory of Comparative Advantage: Why specialisation is the key to success
The Theory of Comparative Advantage: Why specialisation is the key to success
The Theory of Comparative Advantage: Why specialisation is the key to success
Ebook42 pages19 minutes

The Theory of Comparative Advantage: Why specialisation is the key to success

Rating: 0 out of 5 stars

()

Read preview

About this ebook

Why specialisation is the key to success

This book is a practical and accessible guide to understanding and implementing the theory of comparative advantage, providing you with essential information and saving time. 

In 50 minutes you will be able to: 
   • Master the notions of absolute and relative advantage rapidly
   • Specialise in producing goods or services for which you have the strongest, or least weak productivity compared to others. 
   • Understand which are the strengths underlying the interactions of free trade at work within International trade.

ABOUT 50MINUTES.COM| Management & Marketing  

50MINUTES.COM provides the tools to quickly understand the main theories and concepts that shape the economic world of today. Our publications are easy to use and they will save you time. They provide both elements of theory and case studies, making them excellent guides to understand key concepts in just a few minutes. In fact, they are the starting point to take action and push your business to the next level. 
LanguageEnglish
Publisher50Minutes.com
Release dateJun 4, 2015
ISBN9782806264084
The Theory of Comparative Advantage: Why specialisation is the key to success

Read more from 50minutes

Related to The Theory of Comparative Advantage

Titles in the series (28)

View More

Related ebooks

Study Aids & Test Prep For You

View More

Related articles

Reviews for The Theory of Comparative Advantage

Rating: 0 out of 5 stars
0 ratings

0 ratings0 reviews

What did you think?

Tap to rate

Review must be at least 10 words

    Book preview

    The Theory of Comparative Advantage - 50minutes

    Key information

    Names: The law of comparative advantage or the law of relative advantage.

    Uses: Justification of international trade, the outsourcing of tasks in companies, the division of labour, specialisation and trade.

    Why is it successful? The theory offers answers to the questions raised by the principle of absolute advantage put forward by Adam Smith (Scottish economist, 1723-1790), and provides proof that specialisation and trade are mutually beneficial and sources of wealth. It also provides advice to increase efficiency, and consequently productivity.

    Key words:

    Absolute advantage: The advantage held by a person who is able to produce the same product as someone else, but with a greater output for the same amount of resources.

    Factor endowment: The resources that a country possesses, including land, labour, capital and entrepreneurship.

    Markets: Efficient organisational structures for economic activity, in which households and companies freely choose to allocate their resources.

    Opportunity cost: What is given up produce a unit of a good, measured in units of another good.

    Relative advantage: The advantage held by a person who has a lower cost

    Enjoying the preview?
    Page 1 of 1