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The ability to produce goods and services at a lower opportunity cost than that of trade partners. If someone has a lower opportunity cost of producing a given service, that person enjoys a comparative advantage in the production of that service.
A video outlining comparative advantage and how it compares to absolute advantage.
Quick recap on the main economic justifications/reasons for countries to trade with one another for greater economic prosperity.
What generates comparative advantage? We look briefly at geography, factor proportions, increasing returns to scale and institutions such as labor market flexibility.