Principles of Macroeconomics / Unit 17 MAC 1609 short lesson, about 20 seconds
When One Country Is Better at Everything
Captions available
The idea
A country can need fewer workers for every good and still gain from trade. Comparative advantage picks out the good where its advantage is relatively largest, and its partner's where its disadvantage is relatively smallest.
In practice
Northland is better at both and still gains by leaving cloth to Southland.
Where people slip
Total superiority cannot beat a time constraint; every worker has the same hours.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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