At one time, most of the cars produced in Mexico were sold in Mexico. Today, however, Mexico both exports and imports cars. How can comparative advantage explain these data?

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Business

Brooklynn Bonilla

29 July, 14:13

At one time, most of the cars produced in Mexico were sold in Mexico. Today, however, Mexico both exports and imports cars. How can comparative advantage explain these data?

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Answers (1)

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Ray · Answer 1

Mexico's speciality is the manufacture of high-end vehicles and it exports those. They then import low-end vehicles that are usually manufactured at a low cost in other places.

Explanation:

Comparative advantage refers to the ability of an economy to create products and services at a reduced cost than that of the business partners.