Question

Why is it difficult to prove comparative advantage?

Answer 1

answer :

Comparative advantage is an important theory of international economics. According to the theory a country will produce more of a commodity for export in which it has comparative advantage.

It is difficult to prove due to following reasons:

•    Theory is based on unrealistic assumptions
• Complex procedure to calculate the comparative advantage of a country
• Hard to calculate how efficiently a country will produce both the goods
• Difficult to test because of the lack of relevant data