At one time, most of the cars produced in Mexico were sold in Mexico. Today, however, Mexico both exports and imports cars. How can comparative advantage explain these data?

Question

Charles Bonilla

Business

2 July, 02:42

At one time, most of the cars produced in Mexico were sold in Mexico. Today, however, Mexico both exports and imports cars. How can comparative advantage explain these data?

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Answers (1)

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Maci Flores · Answer 1

Mexico's speciality is the manufacture of high-end vehicles and it exports those. They then import low-end vehicles that are usually manufactured at a low cost in other places.

Explanation:

Comparative advantage refers to the ability of an economy to create products and services at a reduced cost than that of the business partners.