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11 September, 06:08

The united states exports corn and aircraft to the rest of the world and it imports oil and clothing from the rest of the world. do you think this pattern of trade is consistent with the principle of comparative advantage?

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  1. 11 September, 06:29
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    Producing corn was one of the things that the Midwest in the US is good at (they are better than the Himalayas), therefore, US exporting corn to the Himalayas would be expected.

    They are also expected to make airplanes to deliver to other countries (together with computers) since the US is relatively technologically advanced.

    The US needs to import some oil unless they want to price to dramatically increase even though the US does not have enough oil to supply the whole country.

    The US will also allow China to produce clothing for them and to make other things to send to China since it is much cheaper to produce clothing elsewhere.
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