The Concept of Comparative Advantage If each country specializes in the production of the goods with lower opportunity costs, trade can be beneficial for both countries Roses have lower opportunity costs in South America Computers have lower opportunity costs in the U.S a The benefits from trade can be seen by considering the changes in production of roses and computers in both countries Copyright C 2003 Pearson Education, Inc Slide 1-7Copyright © 2003 Pearson Education, Inc. Slide 1-7 ▪ If each country specializes in the production of the goods with lower opportunity costs, trade can be beneficial for both countries. • Roses have lower opportunity costs in South America. • Computers have lower opportunity costs in the U.S. ▪ The benefits from trade can be seen by considering the changes in production of roses and computers in both countries. The Concept of Comparative Advantage