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商务英语写作-Absolute Advantage

商务英语写作-Absolute Advantage
商务英语写作-Absolute Advantage

商务英语写作

Absolute Advantage

absolute advantage In economics,absolute advantages refers to the ability of a party (an individual, firm, or country) to produce more of a good or service than competitors, using the same amount of resources.A party has an absolute advantage when using the same input as another party, it can produce a greater output.Since absolute advantage is determined by a simple comparison of labor productivities, it is possible for a party to have no absolute advantage in anything.It can be contrasted with the concept of comparative advantage which refers to the ability to produce a particular good at a lower opportunity cost.

Adam Smith developed the principle of absolute advantage. The economist Paul Craig Roberts notes that the comparative advantage principles developed by David Ricardo do not hold where the factors of production are internationally mobile. Limitations to the theory may exist if there are single kind

of utility. The very fact that people want food and shelter already indicates that multiple utilities are present in human desire. The moment the model expands from one good to multiple goods, the absolute may turn to a comparative advantage. However, global labor arbitrage, where one country exploits the cheap labor of another, would be a case of absolute advantage that is not mutually beneficial.

Generally, in international trade, countries export goods and services for which they have an absolute advantage in and import goods and services in which another country has the absolute advantage. According to the theory of absolute advantage, a country that has no absolute advantage in any product or service, then no trade will occur. The two concepts have applications outside international trade, though this is where they are most commonly used. Suppose that two castaways on a desert island gather both fruit and grain, which they then share equally between them. Suppose that Castaway A can gather more fruit per hour than Castaway B, and therefore has an absolute advantage in this good. Nonetheless, it may well make sense for A to leave some fruit-gathering to B. This is because it is possible that B gathers fruit slightly slower than A, but gathers grain extremely slowly. One needs to look at

comparative advantage rather than absolute advantage, to discover how A and B can each best allocate their effort. If A’s initial advantage over B in grain-gathering is greater than his or her advantage in fruit-gathering, then fruit-effort should be transferred from A to B, to the point where A’s comparative advantages in the two goods are equal. Thus it may be rational for fruit to flow from B to A, despite A’s absolute advantage.

The concept of absolute advantage is generally attributed to Adam Smith for his 1776 publication An Inquiry into the Nature and Causes of the Wealth of Nations in which he countered mercantilist ideas. Smith argued that it was impossible for all nations to become rich simultaneously by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their absolute advantage. Smith also stated that the wealth of nations depends upon the goods and services available to their citizens, rather than their gold reserves. Absolute advantage does not take into account opportunity cost.

While there are possible gains from trade with absolute

advantage, comparative advantage extends the range of possible mutually beneficial exchanges. In other words it is not necessary to have an absolute advantage to gain from trade, only a comparative advantage.

Origin of the TheoryThe concept of absolute advantage is generally attributed to Adam Smith for his 1776 publication An Inquiry into the Nature and Causes of the Wealth of Nations in which he countered mercantilist ideas. Smith argued that it was impossible for all nations to become rich simultaneously by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their absolute advantage. Smith also stated that the wealth of nations depends upon the goods and services available to their citizens, rather than their gold reserves. Absolute advantage does not take into account opportunity cost.

While there are possible gains from trade with absolute advantage, comparative advantage extends the range of possible mutually beneficial exchanges. In other words it is not necessary to have an absolute advantage to gain from trade, only a comparative advantage.

Examples Example 1Party A can produce 5 widgets per hour with 3 employees.

example 1

Party B can produce 10 widgets per hour with 3 employees.

Assuming that the employees of both parties are paid equally, Party B has an absolute advantage over Party A in producing widgets per hour. This is because Party B can produce twice as many widgets as Party A can with the same number of employees.

Example 2Country A can produce 1000 parts per hour with 200 workers.

example 2

Country B can produce 2500 parts per hour with 200 workers.

Country C can produce 10000 parts per hour with 200 workers.

Considering that labor and material costs are all equivalent, Country C has the absolute advantage over both Country B and Country A because it can produce the most parts per hour at the same cost as other nations. Country B has an absolute advantage over Country A because it can produce more parts per hour with the same number of employees. Country A

has no absolute advantage because it can’t produce more goods than either Country B or Country C given the same input.

Example 3You and your friends decided to help with fundraising for a local charity group by printing t-shirts and making birdhouses.

Scenario 1: One of your friends, Gina, can print 5 t-shirts or build 3 birdhouses an hour. Your other friend, Mike, can print 3 t-shirts an hour or build 2 birdhouses an hour. Because your friend Gina is more productive at printing t-shirts and building birdhouses compared to Mike, she has a comparative advantage in both printing t-shirts and building birdhouses.

Scenario 2: Suppose Gina wasn’t as agile with the hammer and could only make 1 birdhouse an hour, but she took a sewing class and could print 10 t-shirts an hour. Mike on the other hand takes woodworking and so he can build 5 birdhouses an hour, but he doesn’t know the first thing about making t-shirts so he can only print 2 t-shirts an hour. While Gina would have the absolute advantage in printing shirts, Mike would have an absolute advantage in building birdhouses.

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I Fashion Co.Ltd. 6 2 1 – 1 2 # Student’s Apartment Business College of Shanxi University Taiyuan City, Shanxi Province China 9 May 2011 Mr. Rabbit: Sales Manager Empire Typewriters 190C Happy Street New York America Dear Mr. Rabbit Re: Office Furniture Details Thank you for your letter of May 8. We are grateful to you for your interest in our office furniture. In reply to your inquiry in your last letter, we hereby send you our illustrated catalogue and price list with details as follows. 20 Solid Wood Desks @ RMB 1,000 RMB 20,000 20 Office Swivel Chairs @ RMB 300 RMB 6,000 20 Solid Wood Bookcases @ RBM 1500 RMB 30,000 RMB 56,000 Less 15℅ discount for payment within 30days RMB 8,400 TOTAL RMB 47,600 The above quoted price includes transportation and insurance. Please note that this quotation is subject to acceptance within three weeks, we can guarantee delivery five days of receipt of a firm order. We look forward to your order and long-term cooperation with you. Yours sincerely for I FASHION

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BEC商务英语写作开头结尾常用句型 第一部分、BEC作文段首句常用句型: 一、对立观点命题形式的首句: 1. Many people do not doubt that A is superior to B , while others think quite differently on the issue of _____. Personally, I stand on the side of A . 2. Some people say A , other people argue B . In a word , _____. But I cannot agree this point of view for many reasons. 3. There are different views concerning this topic . Some people like to CHOOSE A , some prefer to CHOOSE B . Personally , I prefer B . I think B has more advantages. 4. From my point of view , it is more advisable to CHOOSE A than to CHOOSE B . 5. Despite the fact that most people prefer A , I would like to choose B because the following reasons . 6. In general , I prefer to _____ . 7. As far as I am concerned , I would like to prefer _____ . 8. When it comes to _____ , most people tend to believe A . But others consider B as _____ . 9. When asked about _____ , the vast majority of people would support that A . But others regard B as _____ . 10. At the risk of address the issue too direct , I prefer A because I think that _____ . 11. When asked about _____ , many people give their opinions that _____ , but other people may see _____ differently . 12. When faced with _____ , quite a few would claim that _____ , but others , in contrast , deem _____ as _____ .

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