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Identify a comparative advantage that exists between two countries globally. Justify/argue persuasively (using examples) for the...

Identify a comparative advantage that exists between two countries globally. Justify/argue persuasively (using examples) for the comparative advantage and why you think one country may have a comparative advantage over the other country.

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Answer #1

Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries.

A comparative advantage that exists between two countries globally is the example of Kuwait and USA. Kuwait has comparative advantage over USA when it comes to manufacturing of oil-based chemicals. This is because of the fact that Kuwait produces large quantities of oil locally and as such the country has access to a cheap source of raw material that is used for making the chemicals. Kuwait gets a significant amount of raw materials from the oil distillery process of its oil industry and hence can make chemicals at a very low cost. Thus Kuwait can make chemicals at a lower opportunity cost when compared to USA.

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