Running Head: BUSINESS ECONOMY DISCUSSIONBusiness Economy DiscussionInstitution AffiliationDate1BUSINESS ECONOMY DISCUSSION2Discussion 1Comparative advantage occurs when a country produces products for a lower opportunitycost as compared to other countries (Ruffin, (2017). Coffee is one product that is consumed on adaily basis and countries that farm it has a comparative advantage. Just like stated in thediscussion, US does not farm coffee that is highly consumed, but in my opinion, since the UnitedStates is better at producing wheat and Brazil produces coffee, US can exchange a portion ofwheat for some coffee that Brazil produces. I agree with the discussion that due to differences insoil chemistry, weather and amount of rainfall, the taste of the final coffee product differs andone country will have an absolute advantage over another country concerning quality. I thinkthese countries enjoy an absolute advantage because of the excellent climate for the coffeefarming and the productivity edge it has over the other countries and it requires fewer resourcesto produce a product. In my opinion, nations that specialize in comparative advantage have anopportunity to gain from trade. A country can have a comparative advantage on one thing andnot have a comparative advantage on the other, and I believe this is the rationale for a free tradeagreement.Discussion 2Saudi Arabia country has a comparative and absolute advantage in oil production becauseit prod ...
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