Input/Output

Input/Output

Absolute advantage:

• Individual: exists when a person can produce more of a certain good/service than someone else in the same amount of time
• National: exists when a country can produce more of a good/service than another country can in the same time period

Comparative advantage:

• Individual/national: exists when an individual or nation can produce a good/service at a lower opportunity cost than can another individual or nation

Input problems

• the country/individual that uses the least amount of resources, land or time, has the absolute advantage

Output problems

• country/individual that can produce the most has the absolute advantage
• The country/individual that has the lowest opportunity cost has the comparative advantage in that product
• (in some format it deals with production)

Absolute advantage

• faster, more, more efficient

Comparative advantage

•  lower opportunity cost