Sunday, March 25, 2007
Comparative Advantage
In any market, the individuals who have comparative advantage strive. In trade, a comparative advantage in producing a good that others need puts you in a great position. You can find someone who needs your good who can't produce it as efficiently as you can and get something in return that will be beneficial for you. America has done so well over the past few centuries because they have maintained a comparative advantage in innovation. As long as you stay innovative, you will find more efficient ways of doing things, which in turn will lead to you being successful. Businesses are constantly searching for anything that will give them a leg up on the competition, or a comparative advantage. For example, if McDonald's can find a more efficient way of making cheeseburgers than Burger King can, then they will likely be more successful than Burger King. In Civ, it is important to constantly upgrade technology and remain innovative to stay ahead of the rest of the market. If new technology enables you to grow crops more efficiently, then you will produce more food and be able to feed a larger population. If you can do things more efficiently than the rest of the market, then you will be successful.
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Comparative advantage also helps out in trade when you produce commodities such as fish, wheat, or wine that other countries cannot produce and need for their economies. Use commodities to your best advantage and trade them for gold per turn as often as you can.
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