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the example isn't helpful because of [...] 1) The unexplained reason why Xia can produce food so cheaply.

No explanation is needed.

http://en.wikipedia.org/wiki/Absolute_advantage

http://en.wikipedia.org/wiki/Comparative_advantage



Well, I think an explanation in real-world terms is needed, not theoretical definitions. For example:

1) Does Xia have better climatic conditions? If so, why wouldn't neighbouring countries have similar conditions to become a viable competitor?

2) Do the have better packing and transportation technology? If so, why can't another country develop/buy/steal the technology?

3) Etc, etc.

Hence, my point is that the imposed constraints may not normally exist.


Interestingly, substituting gas for food, this very scenario is playing out while we speak. http://news.google.com/news?q=ukraine+gas+crisis




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