ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Glossary. absolute advantage when one country can use fewer resources to produce a good compared to another country; when a country is more productive compared to another country gain from trade a country that can consume more than it can produce as a result of specialization and trade.

Detailed explanation-2: -In international trade, the law of comparative advantage is often used to justify globalization, since countries can have higher material outcomes by producing only goods where they have a comparative advantage, and trading those goods with other countries.

Detailed explanation-3: -Whenever countries have different opportunity costs in production they can benefit from specialization and trade. Benefits of specialization include greater economic efficiency, consumer benefits, and opportunities for growth for competitive sectors.

Detailed explanation-4: -Specialization in international economics is when a nation focuses all resources on an area of productivity that they are experts in. Comparative advantage is a factor of specialization where the nation produces something at a lower opportunity cost than other nations.