Question

In the​ 1950s, the economist Bela Balassa compared 28 manufacturing industries in the United States and Britain. In every one of the 28​ industries, Balassa found that the United States had an absolute advantageLOADING.... In these​ circumstances, would there have been any gain to the United States from importing any of these products from​ Britain? Explain.

Answer 1

Answer:

Yes there would be a gain to the United States from importing any of those products from Britain because it only has absolute advantage not comparative advantage.

Explanation:

Absolute advantage in international trade is the ability of a nation to produce more goods with its resources without considering that  there might a better alternative to which resources can be deployed that would yield more output compared to its trading partners.

While on the other hand ,comparative advantage is when a country has a lower opportunity costs in producing an item compared to its rival nations.

Which means the country that has comparative advantage is given up less opportunities when producing its desired goods viz-a-viz its competing nations.

In other words,absolute advantage does not guarantee efficiency,only comparative advantage does.