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)