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Chapter 20: Q. 18 (page 494)

Why does the United States not have an absolute advantage in coffee?

Short Answer

Expert verified

The United States does not have an absolute advantage in coffee because the climatic condition is unfavorable for the production of coffee.

Step by step solution

01

Step 1. Meaning of Absolute Advantage.

A country has an absolute advantage in those products in which it has a productivity edge over other countries.

02

Step 2. The United States does not have an absolute advantage in coffee.

The United States does not have an absolute advantage in coffee because the climatic condition is unfavorable for the production of coffee. A coffee tree cannot tolerate very high or low temperatures.

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Most popular questions from this chapter

Why might a low-income country put up barriers

to trade, such as tariffs on imports?

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From earlier chapters you will recall that technological change shifts the average cost curves. Draw a graph showing how technological change could influence intra-industry trade.

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.

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