Question

Explain the concept of comparative advantage and the role it plays in the development of trading cities. List and explain any additional economic conditions necessary for the development of trading cities. Explain what additional conditions are necessary for the development of a factory city.

Answer 1

Comparative advantage is when a country produces a good and service for a lower opportunity cost than other countries opportunity cost measures a trade off. A country with a comparative advantage makes the trade off worth it. The advantages of buying their good or service outweigh the disadvantages. The country may not necessarily the best at producing something. But the good or service has a low opportunity cost for other countries to import.

TRADE: Trade can be key factor in economic development. The prudent use of trade can boost a country's development and create absolute gains for the trading partners involved. Trade has been touted involved as an important tool in the path to development by prominent economists. However trade may not be a panacea for development as important question surrounding how free trade really is end the harm trade can cause domestic infant industries to come into play.

Conditions which are necessary for the development of a factory city are as follows :

Improving factory working conditions A commitment to safety, fairness, dignity and respect.

Use of machinery with then division of labor reduced the required skillll level of workers and also increased the output perworker.