1.5: Comparative Advantage vs. Absolute Advantage
- Watch this video about comparative advantage specialization of a country and the benefits from trading with other nations.
- Read this section, which covers the underlying meaning of the model of comparative advantage as it is used to analyze how countries as a whole deal with scarce resources.
- Watch this video about comparative advantage and absolute advantage and think about how a small country is still able to make the most of its scarce resources.
- Review this spreadsheet, which presents a hypothetical yet conceptually realistic illustration of the choices that countries face when exploring trade and productive specialization, and think about the questions it asks.
- Read this review of the concepts of absolute advantage, comparative advantage, and opportunity costs.