Principles of Microeconomics / Unit 1 MIC 0028 short lesson, about 20 seconds
Absolute and Comparative Advantage
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The idea
Absolute advantage means making more of a good with the same resources. Comparative advantage means making it at a lower opportunity cost.
In practice
A country gives up less wheat to grow sugar than its neighbor, so it grows the sugar.
Where people slip
Comparative advantage can come from being poor at the alternative rather than good at the good itself. Unit sixteen 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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