Absolute & Comparitive Advantage

by Hanh N. 1:42 PM 1 comments
absolute:
  • individual: exist when a person can produce more of a certain good/service than someone else in same amount of time. 
  • national: exist when a country can produce more of a good/services than another country can in same time. 
comparative:
  • individual/national: exist when individual or nation can produce a good/service at a lower opportunity cost than another individual or country.
input problems: the country or individual can produce a set amount of something by using the least amount of resources/land/time has the absolute advantage.

chosen item
forgone item
output problem: looking @ production

what is given up
what is produced

1 comment:

  1. UnknownMay 18, 2015 at 7:09 AM

    Your post was short, sweet and to the point. The only criticism I have is that there is no visual. If you had a picture or video to further explain AA and CA, your post would've been better.

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