Question

Select a Country that starts with the letter A

You are to select a country whose name begins with the same letter as YOUR first name. For instance, Linda could select Latvia! Begin by going to the Global Edge Web site of Michigan State University. At the Home Page, click on “Global Insights,” which will take you to the page where you can search by Trade Bloc, Country, State, and Industry. Select “Country” from the drop-down menu and begin to find out about your country. Other sources you may want to consider are the U.S. Department of State—see “Countries and Regions” from the menu at the top of the home page. Also consider the C.I.A. World Fact Book—see the drop-down menu on the home page for a list of countries.

Research

Answer the following questions about your country:

• Based on your research, does your country have an absolute advantage in any area of international trade? If so, please describe this advantage and explain why you think they have this characteristic.
  • Remember: Absolute advantage is the ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.
• Based on your research, does your country have comparative advantages?
  • Remember: Comparative advantage refers to the ability of a party to produce a particular good or service at a lower marginal and opportunity cost over another. Even if one country is more efficient in the production of all goods compared to the other, both countries will still gain by trading with each other, as long as they have different relative efficiencies.

Write

Prepare a written summary of your findings, following the guidelines for written assignments. You must include the following information in your summary:

• A brief overview of the country you selected (fewer than 50 words)
• The advantage you identified (absolute or comparative)
• Explanation and justification for making the decision you did. For example, if you selected Latvia and decided that they have an absolute advantage in Gizmos, you would include the following:
  • Latvia accounts for 80 percent of the world Gizmo markets. The world market for Gizmos is _______ per year;
  • The reason why Latvia has an absolute advantage is _______;
  • Latvia benefits from this advantage by_______.

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Answer 1

Hello, I Hope you are doing good. The country selected from A is Australia. Major sources referred are Wikipedia and Government bulletins of Australia

A brief overview of the country Australia

Australia is a highly urbanized country with a population of about 26 million. Major cities in the country are Melbourne, Brisbane, Perth, Sydney is the largest city. In the economy, it is the 14th largest in the world. The country ranks highly in quality of life, health, etc.

The advantage identified

Australia has a competitive advantage in mining and mineral resources. This is due to the high demand and exports to countries like China, the US, Japan, South Korea, etc.
In minerals, it particularly exports Iron-ore, gold, and energy in the form of LNG(liquified Natural Gas), coal. Though these export account for only 3-5% of GDP yet it contributes highly to export performance.

Explanation and justification for making the decision

Australia was the world's largest producer of iron-ore in 2019 supplying approx 580 million tonnes which is 37% of the world's output. Also, it is the largest producer of Aluminium producing Bauxite ore in the world.

It is also the world's largest exporter of coal and LNG. It is also responsible for producing 95% of the world's production of Opal.

Other than the above minerals, Australia also leads in producing and exporting Gold, Diamond, Uranium, etc.

The reason why Australia has an absolute advantage is

Gold rushes of the 1850s has added to the immigrant population to Australia and its sustained culture of mining activities. Mining is also an early income source for Australians. It provides export income, employment to the country. The place is blessed with different kinds of mines all over the continent.
Amongst these Olympic Dam mine in South Australia and Super Pit Gold mine in West Australia are one of the major active mines in the country.

Australia benefits from this advantage by

Although the service sector comprises 63% of the country's GDP, mineral resources maintain to be its absolute advantage because of export income, employment to its population and royalty payments.

If you need further clarification/details upon the same, kindly reach out.

Hope I answered what you needed.

Would love to hear from you

All the Best!!!

<continuing>

In other resources like coal, it may have a comparative advantage. Although it exports maximum in Coal, China produces and uses it, max in the world. Also since the country exports more like coal, it has comparative advantage over other countries as it has less opportunity cost. A country in Europe would prefer to import coal from Australia rather than establishing the mining infrastructure for itself, as it may cost more to produce due to the lesser number of mines or relatively lesser coal in them

I hope this answers your query.