What is the law of comparative advantage, Macroeconomics

Assignment Help:

What is The law of comparative advantage

The law of comparative advantage, though, suggests that it would be unwise of UK economy to try to replicate German model. First German firms have already established a leading position in producing high-quality consumer and capital goods and the comparative and absolute advantage is already in its favour. Second, firms in BRIC economies are trying to compete with Germany and other engineering and manufacturing producers. UK firms could attempt to compete however they may struggle since they are unable to employ workers on significantly lower wages. Third the UK should lay emphasis on the industries where it already has comparative advantage namely high-quality design, niche top-end manufacturing and engineering and most prominently services. The southeast of England is home to a number of the world's leading insurance, marketing, financial and legal and consultancy firms. These industries are very difficult to replicate since they are based on the value of the human capital they employ and not physical capital. The UK has already established these industries and must be careful not to lose them. Free-market economists would argue that government would be wiser to listen to advice of David Ricardo and focus on what the nation already does best instead of trying to copy another nation in a superior position

 


Related Discussions:- What is the law of comparative advantage

Checkijaskfd, kajfasklfasklfj laksflaskfads

kajfasklfasklfj laksflaskfads

Intermediate macroeconomics, An economy's IS and LM curves are given by the...

An economy's IS and LM curves are given by the following equations: with Y indicating output (income), c indicating the marginal propensity to consume, I investment, G gove

Interest rate, assessment of interest rate in the economy of south africa, ...

assessment of interest rate in the economy of south africa, unemployment

Measurement of output, Different approaches to measure aggregate output

Different approaches to measure aggregate output

Agency decides to hire operators, An agency is having problems with persona...

An agency is having problems with personal phone calls made during working hours. Each minute of a personal call costs the agency $0.50 in wasted wages. The agency decides to hire

Medium run adjustment - economy adjustment, Suppose the economy is currentl...

Suppose the economy is currently in recession, and the exchange rate if fixed using the IS-LM model. a) Explain and illustrate the economy adjustment (in the medium run) b) E

Government imposes a price floor, Consider the above table. Assuming the go...

Consider the above table. Assuming the government imposes a price floor on garbanzo beans of $8, what would be the likely result? a. no change, equilibrium would prevail b. T

Determine the economic functions of money, Determine the Economic functions...

Determine the Economic functions of money There are three functions of economics of money - A medium of exchange. - A unit of account - Store of value.

How growth are improved living standards, How growth are improved living st...

How growth are improved living standards The two main benefits of growth are improved living standards and technological advancement. As an economy grows, the output of

Inflation, Inflation (RPI) - another imperative channel. Oil is a necessity...

Inflation (RPI) - another imperative channel. Oil is a necessity for the UK, and is price inelastic therefore one can analyse the correlation between a price shock and inflation. I

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd