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Okay, this is question 2 .2 from chapter 7.
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It is asking, a world trade organization publication calls comparative advantage, arguably the single most powerful insight in economics.
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What is comparative advantage? what makes it such a powerful insight? so recall that comparative advantage, say ca, is the ability for a person, or in the case of the macro economy, a country, to produce some good at a lower.
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Opportunity cost than another person.
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So let's say, actually, lower opportunity cost.
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Okay.
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And the reason that this is such a powerful insight is because by analyzing your comparative advantage versus another person or another country's comparative advantage, you can specialize in order to force or rather cause a favorable balance of trade.
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So for example, let's use the u .s.
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And saudi arabia...