Question

The united states exports corn and aircraft to the rest of the world and it imports oil and clothing from the rest of the world. do you think this pattern of trade is consistent with the principle of comparative advantage?

Answer 1

Answer:

Yes

Explanation:

The comparative advantage is when countries focus on producing a good or service in which they have a lower opportunity cost and then, they exchange them in the international market to be able to get everything they need. According to this, the pattern of trade indicated is consistent with the principle of comparative advantage because the United States focuses on producing corn and aircraft where it should have a lower opportunity cost and exchange it in the international market to get other products the country needs.

Answer 2

Producing corn was one of the things that the Midwest in the US is good at (they are better than the Himalayas), therefore, US exporting corn to the Himalayas would be expected.

 

They are also expected to make airplanes to deliver to other countries (together with computers) since the US is relatively technologically advanced.

The US needs to import some oil unless they want to price to dramatically increase even though the US does not have enough oil to supply the whole country.

 

The US will also allow China to produce clothing for them and to make other things to send to China since it is much cheaper to produce clothing elsewhere.