In: Economics
what are the Comparative and absolute advantages of brazil from 2000-2019
Comparative and Absolute advantages of Brazil from
2000-2019
Comparative advantage, being the ability to produce a particular
commodity better efficient than other, Brazil poses the same on
agro-products after the positive shock in production in the year
2004. Being the major importer of agricultural commodities in
1960’s and 70’s it becomes the world’s third largest exporter of
agricultural products after US and EU. The comparative advantage
which Brazil poses with agro products is not because of the natural
factor endowments they pose, but of the effective intervention of
the state in the production activities. State driven innovations to
acquire new regions and areas to make useful for agriculture made
the nation more productive and to compete directly with the known
agro exporting countries. Even the idea of the state was to
substitute imports by the industrial expansion, it ended up in
developing the advantages in agriculture to a different level. Thus
also helped in f=developing the comparative advantage in producing
machinery including computers.
Absolute advantage, being the ability to produce a commodity better
efficient than other producer or other nation being a nation,
Brazil poses the same in the production of poultry meat including
beef. It also has absolute advantages in oil seeds, ores and etc.
Brazil also tops the list for the coffee exporters in the world.
The absolute advantage of Brazil can be compared with that of US
when US is having absolute advantage on autos. The opportunity cost
for producing beef is 1/10 of auto in Brazil where in US it is 3/10
of an auto. Thus there are the products where Brazil is having
absolute and comparative advantages.