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The United States has a competitive edge in agriculture. We produce more agricultural goods than any other country in the world, and we have established sizable resources to transport those goods throughout the nation and around the globe.

Who has the comparative advantage in the production?

A nation has a comparative advantage in the production of a good if there is a lower opportunity cost associated with doing so there. Even if one country has a definite advantage in all items, trading with another country will still benefit it.

What is an example of a comparative advantage?

For instance, if a nation excels in producing both cheese and chocolate, they can choose to allocate the appropriate amount of labor to each product. This nation has a comparative advantage in producing chocolate if it takes one hour of labor to make 10 units of cheese and one hour of labor to produce 20 units of chocolate.

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