4/1/15

Absolute Advantage v. Comparative Advantage

•Absolute Advantage

-Individual: exists when a person can produce more of a certain good/service than someone else in the same amount of time.
-National: exists when a country can produce more of a good/service than another country can in the same time period.

•Comparative Advantage

-Individual/National: Exists when an individual or nation can produce a good/service at a lower opportunity cost than can another individual or nation.
•Absolute Advantage
   -Faster, more, more efficient
•Comparative Advantage
    -lower opportunity cost