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Apply your Knowledge of opportunity cost to identify the comparative advantage enjoyed by each country. Now using your knowledge of specialization and trade, show in a multiple- paragraph essay, that the two countries can benefit by consuming more of both goods after trade.
Develop a response that include examples and advice to support your ideas, and wish clearly communicates the request message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well- structures sentences, audience- appropriate language, and correct conventions of standard American Language
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Running head: COMPARATIVE ADVANTAGE
Comparative Advantage
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COMPARATIVE ADVANTAGE
Comparative Advantage
Nations often strive to achieve production efficiencies. Any point of production
possibilities frontier (PPF) signifies the quantities of goods that a country can produce at the least
possible cost. Opportunity cost is the cost of the next best alternative good that is foregone
(Polley, 2012). In the above scenario, if Sri Lanka can produce 1000 bags of rice or 3000 bags of
tea after utilizing all its resources then the opportunity cost for producing 1 bag of rice will be 3
bags of tea while the opportunity for pro...