Determination of Relative Advantages in the Cattle Production of Milk and Meat by Using the Comparative Analysis of Production in the Osijek-Baranja County and Krapina-Zagorje County
AbstractThe use of relative advantages in practice implies that one area concentrates on the products for which there is lower opportunity cost. The Osijek-Baranja County is rich in arable agricultural land. Compared with the Krapina-Zagorje County, where the agricultural land is less represented, it could be said that the Osijek-Baranja County has an advantage in terms of agricultural production. Using the comparative model of production opportunities, this paper analyses that it is necessary to use natural resources and put them into operation after profit. Free trade increases the overall production and consumption of all participants in trade because it enables production specialization in which specific areas have more relative and not absolute efficiency (products with fewer relative marginal costs). The comparative model of production opportunities is the model that points to the production orientation of the goods achieving maximum benefit.