Question

Take a closer look at our local economy or a country of your interest and pick a good or a service that you believe America (or your country of choice) has a comparative advantage in producing. Discuss the factors that you believe give America (or your country of choice) such an advantage.

Answer 1

America has a comparative advantage in the production of goods that require large amount of research and development for example, defense product, pharmaceuticals, education and human resource, IT industry.

US have the comparative advantage in the production of these goods because we have huge capital in the market and all the research and development work takes a large amount of capital in the market. This make the capital relatively cheaper and increase the use of it, giving a comparative advantage i.e. more output at a cheaper cost.