Global Managerial Econ

 Global Managerial Econ Discussion board 2

Primary Task Response: Within the Discussion Board area, write 400–600 words that respond to the following

questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your

classmates. Be substantive and clear, and use examples to reinforce your ideas.

In the Mercantile period, from the 16th through the end of the 18th centuries, trade was driven by a need to

accumulate gold and silver. Nations worked to restrict imports and drive exports. With the advent of the Industrial

Age, classical economists began to look at trade and international commerce in a different light. In his seminal

work The Wealth of Nations, Adam Smith discussed the idea that the basis of trade could be seen in light of what

he called absolute advantage. His contemporary, David Ricardo, took a different and modified approach and laid

out a framework called comparative advantage. This latter theory is the basis for all modern views of international

trade. For this Discussion Board, complete the following:

 Define absolute and comparative advantage.

 Compare the two views on trade.

 How does the concept of opportunity cost factor into comparative advantage?

 Discuss why you think comparativ