Table of Contents What is Comparative Advantage Comparative Advantage Examples Absolute Advantage vs Comparative Advantage How to Calculate Comparative Advantage Comparative Advantage FAQs Comparative Advantage Definition Written by Paul Boyce Posted in Macroeconomics > International Trade Last Updated October 30, 2022 What is Comparative Advantage Comparative advantage is where a nation is able to produce
International trade is the exchange of goods and services between nations. These are known as imports, where the country pays another for its goods and services. And there are exports, where the country sells its goods and services.
True free markets don’t exist anywhere in the world. This is because free markets and free trade go hand in hand. There exists no country that has free trade with every other. Although Hong Kong doesn’t operate a tariff regime, it is unable to export its products and services to others free of tariffs. Free market ideologies such as neoliberalism are attacked and concluded that they have failed.