Comparative Advantage Essay Example | Topics and Well Written Essays - 500 words

Comparative Advantage - Essay ExampleIt is however, critical to note that this advantage is relatively low as compared to former(a) countries. In sectors like Mineral fuels and apparels, US is relatively at disadvantage as compared to other countries and whitethorn be the net importer of goods and services quest in both these categories. Finance and insurance sector also seem to lose its competitiveness as compared to other countries such as Japan and Switzerland.The entropy in table 5.1 indicates that US may not have comparative advantage in different sectors as compared to other countries. This may be owe to different factors including lack of room for economic expansion during recent years. Further, US deliverance is believed to be transitioning towards service based economy therefore different sectors of the economy may be losing their comparative advantage as other countries may be picking up from where US firms left the competition wide commit for other economies. (Jagdis h N. Bhagwati, Panagariya, & Srinivasan, 1998)Japan seems to enjoy greater level of comparative advantage in producing vehicles. This suggests that vehicle production in Japan is relatively cheaper as compared to other countries and Japan can enjoy relative comparative advantage in this sector. As compared to US, Japan is far ahead in producing vehicle much expeditiously and at lower costs.Japan also seems to enjoy greater level of comparative advantage in producing electronic equipment and enjoys greater advantage over US. This may also indicates that Japans economy is still industrial based with strong focus upon maintaining industrial base of the economy through achieving better comparative advantage.A relatively positive comparative advantage is also enjoyed in the finance and insurance sector indicating that financial sector in Japan is relatively more efficient as compared to financial sector of US. This may also be