Full text: International trade

THREE CASES 
- 
) 
In the United States the effectiveness of labor in producing 
copper is twice as great as is that of labor in producing copper in 
Germany; cost is one-half as great. In Germany, on the other 
hand, the effectiveness of labor in producing linen is twice as great 
as it is in the United States for that article; cost (of linen) again is 
one-half as great. 
Each country has an absolute advantage over the other in the 
production of one of the commodities. 
Case II. EquaL DIFFERENCES 
RA i. 8 
In the U. S. 10 days’ labor produce 30 lbs. copper 
re 0.8.10 5" £4 » 15 yds. linen 
” Germany 10 7” , " 20 lbs. copper 
" Germany 10 x 3 10 yds. linen 
Here cost is lower in the United States than in Germany — the 
effectiveness of labor is greater — as regards both commodities, 
and in equal degree for both. The ten days produce 30 of copper 
in the United States, 20 in Germany. The ten days produce 15 of 
linen in the United States, 10 of linen in Germany. Labor is more 
effective in the United States all around by fifty per cent. 
Case III. CoMPARATIVE DIFFERENCES 
(a) In the U. 8S. 1" dav-" labor nroduce 30 Ibs. copper 
3 NUS ® vds. linen 
” German hn. copper 
” Germany '~ linen 
(b) In the U. 8 © copper 
2. U.S. -. linen 
” Germany - copper 
” (Germany vas. linen 
Case ITI has two variants. In variant (a) the American effec- 
tiveness of labor is greater than the German in copper (30 to 20); 
whereas in linen there is no difference (15 in both countries). 
Considering the whole situation, the United States is the more 
fortunate country; but it is her better fortune in copper that 
alone makes the difference. 
In variant (b), however, the United States has lower cost and 
oreater effectiveness for both commodities, but not to the same
	        
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