Mr. Robinson
Westfield High School
Home         AP Central         About Me         AP Microeconomics        AP Macroeconomics          AP European History         Economics
Comparative & Absolute Advantage
A country, individual, or firm has an absolute advantage in producing a good if production of the good absorbs fewer resources (or less time, in the case of an individual) than are required in other countries or by other individuals or firms.

A comparative advantage in producing or selling a good is possessed by an individual or country if they experience the lowest opportunity cost in producing the good.
Absolute advantage: 
Comparative advantage:
Module 4
6 Minute Instruction
Basics of Absolute & Comparative Advantage.  
10 Minute Instruction
More focus on Comparative Advantage & Terms of trade.  Pay close attention to the last 2-3 minutes of the video!!! By Khan Academy.  
9 Minute Instruction
Absolute & Comparative Advantage in more depth.  By Khan Academy.  
Watch the three videos.  You may wish to take notes.  Pay VERY close attention to how to calculate OC (Comparative Advantage calculation), the advantages of trade, and how to determine the terms of trade.
Practice Exercises:
Comparative Advantage & Terms of Trade practice: here          Answers: here