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Country Country
A B
Tariffs
$50
Country Country
A B
Tariffs
$50
Country Country
A B
Tariffs
$75
$50
Country Country
A B
Tariffs
$75
$50
Country Country
A B
Tariffs
$75
$50
Country Country
A B
Tariffs
$75
$50
Country Country
A B
Tariffs
$75
$50
Country Country
A B
Tariffs
$75
$50 + 30
Country Country
A B
Tariffs
$75
$80
Country Country
A B
Tariffs
$75
$80
Country Country
A B
Tariffs
$75
Protectionism
$80
Country Country
A B
.
Tariffs
$75
Country Country
A B
Tariffs
Country C
Country Country
A B
Tariffs
Country C
Country Country
A B
International Trade
Milestones
Country C
Country Country
A B
Tariffs
Country C
Country Country
A B
International Trade
Milestones
France 20,000 2
Germany 15,000 3
In this case, we assume both countries are using the same amount of
labor in the same time frame. France has an absolute advantage in
producing wine and Germany has an absolute advantage in
producing machinery.
UK 25 5
Brazil 21 3
The nations will trade: If the UK sells 1 unit of machinery to Brazil for 6
units of wheat, both the UK and Brazil are better off. The UK has a
comparative advantage in producing machinery, Brazil in growing wheat.
Heckscher-Ohlin Factor
Endowment
The factor endowment theory holds that a country will enjoy a
comparative advantage over other countries if it is naturally
endowed with a greater abundance of one of the factors of
economic production.
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