1-The Ricardian Tech Table

Germán Calfat - International Trade Theory and Policy- IOB- University of Antwerp

This slide show illustrates how to determine in which commodity a country has a comparative advantage.

Using a “Ricardian” technology table which shows output per labourer, it shows that a comparison of either:

(a) opportunity costs of production between countries,

or of

(b) relative cost efficiency of a country between commodities

Both lead to the same unambiguous conclusion:

A country has a comparative advantage in the production of the commodity which its

labourers produce relatively cheaply!






























In the next topics we shall see how…...

• A) the same conclusions can be derived using production possibility curves and indifference curves;

• B) adjustments in the international production according to comparative advantage gives rise to a net increase in total output,

• C) when taking into account a country and its population, total output will be different but comparative advantage will not be affected

Documents

1-The Ricardian Tech Table