Question

1. explain why comparative advantage is considered a long - term concept rather than something that changes day - to - day.

Explanation:

Comparative advantage depends on factors like resource endowments (e.g., natural resources, skilled labor), technological capabilities, and institutional frameworks. These factors evolve slowly over time (e.g., building a skilled workforce or developing new tech takes years), not daily. Day - to - day changes (e.g., short - term supply/demand shifts) don't alter the underlying productivity ratios (which define comparative advantage) quickly. So, it's a long - term concept as its determinants have long - term dynamics.

Answer:

Comparative advantage is long - term because its determinants (resource endowments, technology, institutions) change slowly (e.g., skilled labor development, tech innovation take time), not day - to - day.