BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -How Do You Calculate Comparative Advantage? Comparative advantage is usually measured in opportunity costs, or the value of the goods that could be produced with the same resources. This is then compared with the opportunity costs of another economic actor to produce the same goods.

Detailed explanation-2: -A country is said to have a comparative advantage if it produces a good or service with the lowest opportunity cost.

Detailed explanation-3: -The existence of a comparative advantage is, in turn, affected by things such as abundance, productivity, cost of labor, land, and capital. Other factors also might influence a country’s comparative advantage in practical terms, such as a highly developed financial system or economies of scale.

Detailed explanation-4: -When determining comparative advantage, one must consider: opportunity cost. A trading advantage allows countries to: obtain goods they don’t have in exchange for goods they do produce.