It’s Impossible for Any Country to Be the Low-Cost Producer of All Outputs

(Don Boudreaux) Tweet Here’s a letter to a sympathetic correspondent. I apologize for its wonkiness. Mr. W__: Thanks for your e-mail. In response to my piece on microchips and potato chips , you ask “But what happens when they [foreigners] not only make [micro]chips cheaper than we can but also make potato chips and everything else cheaper than we do?” The answer to your question is indisputable: The outcome you describe is, because of the principle of comparative advantage, impossible.

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