Unit 7 Notes - Comparative & Absolute Advantage
So, what is Absolute Advantage? - The producer can produce the most output or requires the least amount of inputs (resources) Ok, so what is Comparative Advantage? - The producer with the lowest opportunity cost (lowest number with calculations) Input & Output Problems? How do we know which is which? Input Problems - Takes a certain amount of input to get a given product (Apples to make a pie) Output Problems - Certain amount of product out of a given input (Miles per hour) (Pieces of Gum per dollar)
