Answer:
Trade and Globalization
Essay:
Comparative advantage
In economic theory, the ‘economic cost’ – or the ‘opportunity cost’ – of producing a good is the value of everything you need to give up in order to produce that good.
Economic costs include physical inputs (the value of the stuff you use to produce the good), plus forgone opportunities (when you allocate scarce resources to a task, you give up alternative uses of those resources).
The freely available economics textbook The Economy: Economics for a Changing World! explains this as follows: “A person or country has a comparative advantage in the production of a particular good if the cost of producing an additional unit of that good relative to the cost of producing another good is lower than another person or country’s cost to produce the same two goods.”
so the Evidence is...:
Is there empirical support for comparative-advantage theories of trade?
The empirical evidence suggests that the principle of comparative advantage does help explain trade patterns. Bernhofen and Brown (2004)25, for instance, provide evidence using the experience of Japan. Specifically, they exploit Japan’s dramatic nineteenth-century move from a state of near-complete isolation to wide trade openness.
Net exports and price changes for 1869, Japan – Figure 4 in Bernhofen and Brown (2014)26
so thats how did economics and trade change through out the years.
