Wednesday, 29 September 2010

Comparative Advantage

This economics idea says that everyone should focus on producing only one good he is best at,  in spite of the fact that he could be pretty good at producing both of them.Im means that is one country produces 50 000 bottles of wine a year and 10 000 jeans a year, it would be better for it to use all the labour and time only for producing wine. Its much more efficient and they can sell/exchange the production surplus in a free market

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