Sunday, May 3, 2015

Absolute and Comparative Advantage

Absolute Advantage 

  • individual - exists when a person can produce more of a certain good or service than someone else in the same amount of time
  • national - exists when a country can produce more of a goods or service than another country can in the same time period
  • faster and more efficient ( time-wise )
Comparative Advantage 
  • individual / national - exists when an individual or nation can produce a goods or service at a lower opportunity cost than can another individual or nation
  • lower opportunity cost
  • production
- lower opportunity cost is GOOD

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