Absolute vs. Comparative Advantage: An Overview
Absolute advantage and comparative advantage are two important concepts in economics and international trade. They largely influence how and why nations and businesses devote resources to the production of particular goods.


In isolation, absolute advantage describes a scenario in which one entity can manufacture a product at a higher quality and a faster rate for a greater profit than another competing business or country can accomplish. Comparative advantage differs in that it takes into consideration the opportunity costs involved when choosing to manufacture multiple types of goods with limited resources.

Respuesta :

Answer:

Comparative advantage differs in that it takes into consideration the opportunity costs involved when choosing to manufacture multiple types of goods with limited resources.

Explanation:

The most tipycal example is the sustancial different between communist and capitalist economist in the 20th century

While the USSR and CHINA focus resources into specific areas like military, space program and other, the rest of the economy halved sustancially while the US and other OTAN members manage to acomplish the same amount of military or lower in some cases(USSR have more missiles and Atomic Boms than US), their economies thrived as their didn't renounce to the production of consumer good to make this.

Another example is the metal en road production While communist China used forced labor and thousand of people they manage to do more road than Europe but Europe used much less worker and thus, lower opportunity cost. and more of other goods could be produced.