ECN
ECN221_Dowell_Week4_Assignment.docx

Without free trade the countries would employ workers

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mean being less productive at an absolute advantage. Without free trade, the countries would employ workers who produce their specialization products without comparative advantage and can become less productive for it. “With free trade, these workers would be directed into more jobs where they are more productive and receive higher pay since the compensation workers receive ultimately depends on how productive they
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ABSOLUTE VS. COMPARATIVE 4 are” (Lee, 1999). Free trade, specialization, opportunity cost, and many other things truly do factor in having a comparative and absolute advantage for the countries. “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy…What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.” -Adam Smith (n.d.).
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ABSOLUTE VS. COMPARATIVE 5 References Adam Smith Institute. (n.d.) Adam Smith Quotes. Retrieved from Lee, D. R. (1999, 10). Comparative advantage. The Freeman, 49 , 41-42. Retrieved from Segal, T. (2018, June 01). Intl Trade – Comparative vs. Absolute Advantage. Retrieved from - comparative-advantage-and-absolute-advantage.asp
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