Question

Why might intra-industry trade seem surprising

from the point of view of comparative advantage?

Short answer

Because of the nature of the intra- industry trade,

intra-industry trade seems surprising from the point of view of comparative advantage.

Step-by-step solution

Step 1. Definition

Intra-industry trade is defined as the situation where countries interchange or exchange alike products which relate to the same industry.

Comparative advantage is defined as the capability of an economy to produce a good or service at a lower opportunity cost as compared to its trading partners.

Step 2. Explanation

This is so because if we look from the perspective or angle of comparative advantage the goods and services in Intra industry trade are of similar industry and similar nature which are exchanged and on the other hand in comparative advantage every nation has to be endowed to different skillsets to trade in their comparative advantage. So that’s why intra-industry trade seems surprising from the point of view of comparative advantage.