Sources of comparative advantage in international trade
Among the main sources of comparative advantage are the following. Climate and natural resources, relative abundance of labor and capital, technology, external economies. Although international trade leads to substantial net benefits, not everyone gains from international trade. Which of the following groups is most likely to lose from trade Comparative Advantage of International Trade. The challenge to the absolute advantage theory was that some countries may be better at producing both goods and, therefore, have an advantage in many areas. In contrast, another country may not have any useful absolute advantages. To answer this challenge, David Ricardo, an English economist, introduced the theory of comparative advantage in 1817.