Chapter 3 was mainly focused on the concept of comparative
advantage. For most of the chapter, the author explained the idea of
comparative advantage using a cattle farmer and potato farmer as an example.
However, this example still left me a little confused. As I read further on, the author gave an
example of an application of comparative advantage using Tiger Woods and
Forrest Gump. This example instantly cleared my concerns and made the principle
easier for me to grasp. Basically, what I gathered from this chapter is that comparative
advantage trumps absolute advantage when it comes to trade because comparative
advantage weighs in opportunity costs. Thus, taking into account comparative
advantage will ultimately allow you to gain more. I would give this section of
the book a difficulty rating of 2 because even though I feel comfortable with
this topic now I was earlier confused.
No comments:
Post a Comment