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Showing posts with the label APPLICATIONS OF COMPARATIVE ADVANTAGE

APPLICATIONS OF COMPARATIVE ADVANTAGE

The principle of comparative advantage explains interdependence   and the gains from trade. Because interdependence is so prevalent in the modern world, the principle of comparative advantage has many applications. Here are two examples, one fanciful and one of great practical importance Should   Tiger Woods Mow His Own Lawn?   Tiger woods spends a lot of time walking around on grass. One of the most talented golfers   of all time, he can hit a drive and sink a pull in a way that most casual golfers only dream of doing. Most likely he is talented at other activities too. For example let,s imagine that woods can now his lawn faster than anyone else. But just because he can now his lawn fast, does this mean he should?