Principles of Microeconomics / Unit 16 MIC 1503 short lesson, about 20 seconds
Comparative Advantage
Captions available
The idea
A country has a comparative advantage in the good it produces at lower opportunity cost, in the other good given up. Ricardo showed in eighteen seventeen that specializing and trading on it benefits every partner, the less efficient included.
In practice
Not who makes more, but who gives up less.
Where people slip
Opportunity cost is unit one's idea; comparative advantage applies it between countries.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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