Chapter 3 Summary

Chapter 3 Summary - Chapter 3 Summary 1. Why should nations...

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Chapter 3 Summary 1. Why should nations trade with other nations? (1) No country is self-sufficient (2) Other countries need products that prosperous countries produce (3) natural resources and technological skills are not distributed evenly around the world What is the theory of comparative advantage? The theory of comparative advantage contends that a country should make and then sell those products it produces most efficiently but buy those it cannot produce as efficiently What is absolute advantage? Absolute advantage means that a country has a monopoly on a certain product or can produce the product more efficiently than any other country can. For example, Zambia has an absolute advantage over many countries in the production of copper due to its copper ore reserves 2. What kinds of products can be imported and exported? Just about any kind of product can be imported and exported. Companies can sometimes find surprising ways to succeed in either activity. Selling in global markets
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Chapter 3 Summary - Chapter 3 Summary 1. Why should nations...

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