Written Assigment II Essay Example | Topics and Well Written Essays - 500 words

Written Assigment II - Essay Example The one that enjoys a higher comparative advantage, for instance computers, should form the primary export while textile, whose production has a lower comparative advantage, should be imported from China (Frederking 3). In this paper, I hold a contrary view to Patrick Buchanan by supporting Ricardo’s theory. Countries chose to engage in international trade with a view of making profits. It would be totally illogical to engage in a business activity where there is no overall profit. As such, the driving force of international trade is the hope of maximizing profits accrued in the production of a given product. In this view, nations engaged in international trade strive to strike a balance by increasing the unit value they gain by exporting a given product. While this takes place, the same country would strive to reduce its engagements in products that do not earn as much profit as the others by the virtue of their production costs. Therefore, in an international trade, a country which exports gains more than that which imports. This is because exporting countries enjoy a favorable balance of payment than those which import (Ritchie 19). The utility derived from utilizing factors of production differs in the production process of different products. For instance, in the case of computers and textile products, it is evidently cleat that United States of America spends less per unit of factors of production when it concentrates on computers than when it concentrates on textile products. In this sense, U.S. is bound to increase its overall profit if it converts the factors of production used in the manufacture of textile products to the manufacture of computers. As such, textile industry becomes the opportunity cost of production of computers. Similarly, China is bound to increase its profitability if U.S. chooses to concentrate on importing its textile products. As such, free