Principles of Macroeconomics / Unit 1 MAC 0026 short lesson, about 20 seconds
Absolute and Comparative Advantage
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The idea
Absolute advantage means making more of a good. Comparative advantage means making it at a lower opportunity cost.
In practice
Brazil gives up less to grow sugar cane; the United States less to grow wheat.
Where people slip
Comparative advantage can come from being poor at the alternative rather than good at the good itself. Unit seventeen works the numbers.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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