Limits to the Theory of Comparative Advantage (HL)

You are expected to evaluate/examine (AO3) the limits of the theory of comparative advantages (HL)

<-- Back to Global

<- Back to 4.1

Benefits

Advantages (HL)

Limits of Comp. Adv. (HL)

Limits (AO3)

Although comparative advantage is a theory that has helped many countries develop their trading, there are quite a few caveats to it. Here are some you should be able to discuss:

It can lead to overspecialization of a certain good or service countries, causing more worldwide harm than benefit
It is viewed as a "Rich Man's Theory" by poorer countries as it tends to benefit more developed countries more

Factors such as transportation costs are ignored.

Google Sites

Report abuse