-Individual- exists when a person can produce more of a certain good/service than someone else in the same amount of time (or can produce a good using the least amount of resources).
National- exists when a country can produce more a good/service than another country can in the same time period.
Comparative Advantage
A person or a nation has a comparative advantage when it can produce the product at alower domestic opportunity cost than can a trading partner.
Examples of output problems
1. Words per minute.
2. Miles per gallons.
3. Tons per acre
4. Apples per tree
5. Televisions produced per hour
Examples of input problems
1. Number of hours to do a job.
2. Number of acres to feed a horse
3. Number of gallons of paint to paint a house.
Specialization and trade
-Gains from trade are based on comparative advantage, not absolute advantage.
https://www.khanacademy.org/economics-finance-domain/microeconomics/choices-opp-cost-tutorial/gains-from-trade-tutorial/v/comparative-advantage-and-absolute-advantage
ReplyDeleteThe above link is a video that helped me understand the difference between absolute advantage and comparative advantage. Your blog also helped a lot! I like how organized and well arranged every section and unit is. Terrific!!
The way you tell the difference between output and input problems is, output problems only states units in its question. (ex: Spain produces 40 tractors and 30 cars. U.S produces 20 tractors and 10 cars.)
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