What does the term comparative advantage mean? How can I use this in an essay based question?

A country has a comparative advantage in something if it can produce it at a lower opportunity cost than any other country.
If for example Mexico were able to source and put together the components of a printer for a lower overall cost (including labour costs) than its trade partners, then Mexico would be said to have a comparative advantage in producing printers.
It is often said that the UK has a comparative advantage in services such as banking and insurance.
This term can be used in many essays, in particular any essay on globalisation or economic unions. Globalisation allows countries to produce what they have a comparative advantage, allowing them to sell some of this good or service to other countries. They can then import from the other countries the goods or services that perhaps they can not produce so efficiently.

AS
Answered by Adam S. Economics tutor

3443 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain how to calculate Price Elasticity of Demand


What is the purpose of loose monetary policy?


How can an increase in government spending affect the economy?


Explain the main reasons for government spending


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning