Go to the CIA World Factbook (Links to an external site.)Links to an external si

Question

Go to the CIA World Factbook (Links to an external site.)Links to an external site. and choose a country other than the United States.

Do some research and explain what goods and services your country specializes in producing (the data you need will be in the Economy link). Explain whether or not this country has a comparative advantage in producing these goods and services. Why do you think your country has a comparative advantage in production of those goods compared to another country like the United States? Please explain in detail. You may want to check the other links on the website, like Geography, etc. Be sure to provide concrete examples and analysis = what exactly gives these countries a comparative advantage in production of these goods? What kinds of goods and services is this country most likely to import from other countries?

Explanation / Answer

For the purpose of this assignment I have chosen Australia.

Australia an advanced economy with a high per capita income and a high ranking in the human development index. The country specializes in mining natural resources, energy, food, banking and telecommunications. The country has a comparitive advantage in the production of the above mentioned goods and services, especially natural resources such as coal, iron ore, copper etc. The reason for this country to have a comparitive advantage in the production of natural resources such as coal, iron ore etc is because of the huge amounts of deposits available with it. It has the largest amount of iron ore resources in the world. The country is highly industrialized due to which it can process the natural resources for domestic as well as export purposes. The country has a large landmass which is semi-arid and is not suitable for cultivation and hence can be utilized for large scale industrial expansion(excluding protected environments with Australia's diverse fauna). Australia also has a decent amount of gold deposits which it uses for investment, jewellery and industrial purposes.

When compared to the US, Australia has a comparitive advantage in the area of mineral extraction and processing. This is due to the availability of large amounts of resources and comparitively a very dry environment with less fertile soils which otherwise could have been used for agricultural production. This country is most likely to import agricultural products, automobiles, Hi-tech goods such as computers and space-related products such as satellites and rockets and oil.

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.