Question

What are some goods in which you think the United States has an absolute advantage in production? What about low wage countries like Thailand and Pakishtan? What about tropical countries such as Costa Rica and Cuba? What about Australia?

Answer 1

It is the high end technology and innovative goods such as production of specialized cars such as electric cars, super computers or advanced processor, vaccines and drugs for exclusive uses to treat diseases, bring absolute advantage to the USA. It is due to the USA with an abundance of capital, human resources and other requirements that facilitate the production of these goods with best efficiency. Thailand and Pakistan are labor intensive countries and these countries are good in producing cloths and agricultural products and own absolute advantage. Thailand also thrives in travel and tourism as well as hospitality goods despite getting lot of FDIs and MNCs producing electronic goods.

Countries like Costa Rica and Cuba have tropical climate that is specialized for the production of specific plants and herbs that can be used to produce bio-tech products. So, these countries can have absolute advantage in producing bio-tech goods. In contrast to it, Australia has best in  class manufacturing facilities as well as dairy farming in the country. It makes them achieve absolute advantage in producing dairy related processed goods that are cheaper as exports to many countries in the world including India ( the one of the top 3 producer of milk in the world). Besides, Australia has huge amount of natural resources, mineral ores that makes them to own absolute advantage in mining products as well.