One who has a comparative advantage in producing a good or service can provide it at a lower opportunity cost than his or her competitors and earn profits from trade.
Mark Hendrickson - What about Walmart?
Art Carden - "Trade is Made of Win" Part 2: Cooperation (LearnLiberty)
JANUARY 04, 2008 by SHELDON RICHMAN
Paul Krugman, the New York Times op-ed writer, has a Ph.D. in economics. Those three magic letters give him an air of authority, as if they represent a valuable accomplishment, yet somehow he manages to consistently give bad economic advice in his twice-weekly column. Go figure. More . . .
JUNE 01, 2007 by SHELDON RICHMAN
When pro-free-market critics of democracy explain why laissez faire is not a winning election issue, they usually say that voters have a no incentive to research economic policy because one vote won't sway the election and the expected payoff to any individual voter is infinitesimal. This "rational ignorance" leaves space for special interests to have their way, despite the fact that if the voters paid attention to what was going on, they wouldn't put up with it. That explanation leads to the conclusion that democracy does not work because outcomes diverge from what people really want. On the other hand, fans of democracy think that the rejection of laissez faire shows the system is working just fine. But both sides agree that voters are rational (employing reason) under the circumstances. Which story is true? Maybe neither. More . . .
NOVEMBER 17, 2006 by SHELDON RICHMAN
"With the 2006 election, America appears to have reached the tipping point on free trade. . . . Anxiety, and fear of jobs lost to India and China, seems a more powerful emotion than gratitude for the inexpensive goods at Wal-Mart. The bribe Corporate America has offered Working America -- a cornucopia of consumer goods in return for surrendering U.S. sovereignty, economic security and industrial primacy -- is being rejected." So writes conservative commentator Patrick J. Buchanan in his post-election analysis. Buchanan may be right. Free traders -- those who reject the bogus idea of a "national economy" -- should be nervous. More . . .
Related Freeman Articles
NOVEMBER 07, 2012 by ISAAC M. MOREHOUSE
Don't let the "fantasy" in fantasy football fool you: The game illustrates some crucial points about opportunity costs and comparative advantage. Isaac Morehouse has been keeping score.
NOVEMBER 30, 2011 by RICHARD W. FULMER
Economic Theory Has a Down-Home Value
NOVEMBER 01, 2000 by TED ROBERTS
Free Trade Does Not Cause Massive Unemployment
NOVEMBER 01, 1999 by DWIGHT R. LEE
The concept of comparative advantage, which I began discussing last month, is a straightforward application of opportunity cost and is almost embarrassingly simple. Certainly people have no trouble understanding and recognizing the importance of this concept in their own personal lives.