What are the advantages to specialization and comparative advantage in a country's economy?

Question

please give me a good example.

All I have so far is that the country will have more of one good

Answer 1

Say for example china is good at producing sport shoes.  They have cheap labor and lots of raw materials which makes the shoe of good comparative quality and at a very cheap price.

Then you have the U.S.  who is good at producing SUV's (example).  They have the expertise and know how on producing big, luxurious, modern SUV's.

Now say China wants to make SUV and the U.S. wants to produce sport shoes.  Both countries will be at a disadvantage.  The U.S. would produce the sport shoes at extremely high prices and china's SUV's are going to be of low quality and expensive.

The solution is specialization and comparative advantage.  If China is good at making shoes and america is good at making SUV then both countries should focus their efforts on producing what they are good at.  And then they can trade their products.  We will get good quality cheap sports shoes and china can get good quality SUV.

Hope the concept is clearer now.

On a side note, this is the reason why you don't see american made shoes.  Labor for production would drive the price on the shoes to prices where most people would not be able to afford them.

Also this is another reason why american don't produce flat screen TV sets.  Japan, Korea and china can produce good quality sets and American can't.   So we stick to what we know best.