Question

Why does the US have a comparative advantage over New Zealand in the production of lamb during April and May, while New Zealand enjoys a similar comparative advantage over the US during the months of October and November?

A. Due to differences in lamb breeding seasons.
B. Seasonal changes in consumer demand for lamb.
C. Variations in lamb processing technologies.

Answer 1

The US and New Zealand have shifting comparative advantages in lamb production related to their differing breeding seasons, with the US's peak in April and May and New Zealand's peak in October and November.

Step-by-step explanation:

Comparative advantage refers to the ability of a country to produce goods and services at a lower opportunity cost than its trade partners. A country with a comparative advantage can trade with others to benefit all involved. In the context of the US and New Zealand lamb production, the differences in breeding seasons likely explain the shifts in comparative advantage. During April and May, the US may have a comparative advantage because that is when its lamb production peaks owing to favorable breeding seasons, leading to lower costs and a more efficient production process. Conversely, New Zealand lamb production reaches its peak in October and November, possibly due to the Southern Hemisphere's opposite seasons affecting the breeding cycle of sheep. Trading during these periods allows each country to take advantage of their respective peaks in lamb supply.