International trade

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Monograph

Identifikator:: 1758394757

URN:: urn:nbn:de:zbw-retromon-136209

Document type:: Monograph

Author:: Taussig, Frank William http://d-nb.info/gnd/120199459

Title:: International trade

Place of publication:: New York, NY

Publisher:: Macmillan

Year of publication:: 1927

Scope:: XXI, 425 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

CHAPTER 4 COMPARATIVE COSTS WE turn now to Case III, that of differences in comparative costs. For convenience in following the numerical illustrations, [ shall use in the exposition that follows a different set of figures from those of the preceding chapters. The same principles are involved; the figures now used are selected for their greater simplicity. Let us suppose that In the U. S. 10 days’ labor produce 20 wheat 2. * U.S. 108’ 4 3 20 linen ” Germany i) » » 10 wheat ” Germany 10 ” is 1 15 linen wa he | Here the United States has an advantage in the production of both commodities. The effectiveness of her labor is greater both in wheat and in linen, but it is not greater to the same degree in both. In wheat it is as 20:10, while in linen it is as 20:15. The American effectiveness of labor in wheat is twice as great as that of Germany ; in linen it is one-third greater. There is in the United States a comparative advantage in the production of wheat. We might denote the situation by a different set of phrases. Instead of speaking of a comparative advantage, we might say that the United States has a superior advantage in wheat. She has an advantage in both commodities, but one greater in wheat than in linen. Germany, on the other hand, has an inferior disadvantage in linen. She is at adisadvantage in producing both commodities ; but the disadvantage is less in the case of linen than in that of wheat. The outcome of an inferior disadvantage in trade between countries (or for that matter between individuals, or between groups within a country) is precisely the same as that of a superior advantage. 99

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