Unit 7: Comparative and Absolute advantage

Comparative and absolute advantage

• Absolute advantage: who could produce more with the same resources. Or who could produce the same output with less resources. 
• Example: papa johns producing 20 pizza while mcdonald produces 4, because they can. 
• Comparative advantage: who could produce with the lowest opportunity cost
• Input vs output
• Input: Number of hours to do a job. Number Of gallons of paint to paint a house. Number of acres to feed a horse. 
• Output: Miles/gallon, ton/acre, words/min, apples/ tree, computers produced/hour