Factors of production & comparative advantages

Running Head: Factors of production & comparative advantages
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China and Japan have an absolute advantage in the production of one commodity against the other. For instance, in the case of Japan production of computers will be much cheaper as there is available of labour and within reach. This minimizes the additional costs in which the country may incur when importing labour. In the case of China, it is advantageous to produce corn as the land required for the crop cultivation is available. As bought countries specializes in the commodity in which it has absolute advantage, the cost minimization and therefore increased revenue outlay is guaranteed. However, where Japan`s labour supply incr...