Does this fact mean that we should not … The United States can produce either food or computers at a one-to-one trade off. Chinese workers produce simple consumer goods at a much lower opportunity cost. The domestic supply-and-demand diagram below represents a product in which the United States does not have a comparative advantage. The United States has a very mature market for government bonds. The United States gives up the least to produce a bushel of corn, so it has a comparative advantage in corn production. Therefore, we should have a comparative advantage in things that are produced using a lot of educated people. D.Mexico has an absolute and comparative advantage in shoes. The United States is an abundance of the low priced labor which forces in the production of goods that are human and physical capital intensive with the division of global production as brings the higher global output and the development of new technology has a comparative advantage in the production processes that can make use of less skilled labor … The rigorous way to answer this questions would be to calculate the cost of producing different goods and services in the United States and comparing it to similar costs of production across the world. Any investor who C.There is not enough information to tell. America's comparative advantage. A contemporary example: China’s comparative advantage with the United States is in the form of cheap labor. As it turns out, America's manufacturing sector -far from withering in the face of foreign competition - is actually thriving. Your answer is correct. This surplus reached $242 billion in 2017, offsetting about 25% of the deficit in the trade of goods. The United States has an absolute advantage in producing sugar over all of the other sugar-producing countries. What impact do foreign imports have on domestic price and quantity? the domestic price, increasing consumption and … B.Mexico has a comparative advantage, and the United States has an absolute advantage in shoes. In other words, if the United States chooses to produce another personal computer, it must give up one bushel of food. Here's where the notion of comparative advantage comes in. In this example, there is symmetry between absolute and comparative advantage. A.The United States has an absolute and comparative advantage in shoes. of comparative advantage becomes the proposition that the United States should be a net exporter of goods in which it has a comparative advantage- whether it … While the balance of trade in goods is negative, the United States runs a large surplus in the trade in services, reflecting its global comparative advantage in this sector. a. We also have a lot of money that we can spend on capital goods. China, therefore, has a comparative advantage in producing rice. An example of comparative advantage in financial assets seems a bit more complicated, but the principle emerges nonetheless. of oil mean that the Middle East has a comparative advantage in oil pro-duction, so Middle Eastern nations export oil to the United States. That bushel of food is the United States' opportunity cost of producing another computer. 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