Comparative advantage is an important concept to explain how economies work. Because of comparative advantage, it is possible for people to use their skills and time productively even if they are not the best at something. To help illustrate the usefulness of this concept: Think of an example (work, family chores, school projects, etc.) where you might not have an absolute advantage at something, but you do have a comparative advantage. By this, I mean that you might not be the fastest or the best at a particular job. Other employees, family members, etc. may do the job quicker or better than you could. But their opportunity cost was high, meaning they had something more necessary for them to do, so it made sense for you to do this job.
- Think of an example (work, family chores, school projects, etc.) where you might not have an
absolute advantage at something, but you do have a comparative advantage. By this, I mean that you might not be the fastest or the best at a particular job. Other employees, family members, etc. may do the job quicker or better than you could. But theiropportunity cost was high, meaning they had something more necessary for them to do, so it made sense for you to do this job. - Explain how this was an example of you having a comparative advantage but not an absolute advantage.
- Did you (and the others in your example) specialize according to comparative advantage? What job(s) did you do? What did other people do?
- Did this result in a more efficient and more productive use of everyone's time? Explain how.
▪︎A comparative advantage happens whenever a nation can create merchandise at lower opportunity cost in contrast with other countries.bAn absolute advantage exist when a nation is most proficient or the best in delivering a product. A person may not be the quickest or best at making a specific showing and different workers or relatives might do the work quicker or in a greatly improved way.So different individuals enjoy outright benefit. Yet, their opportunity cost was high. The person's comparative advantage was greater than the other members since he had a lower opportunity cost.
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