UNIT VII Comparative and Absolute Advantage

Absolute Advantage
-who can produce more with the same resource
-who can produce the same output with less resources
-example: papa johns producing pizzas while domino producer 4

Comparative Advantage
-who can produce with the lowest opportunity cost
-lowest opportunity cost: actually looking at numbers

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 per gallon
-tons per acre
-words per minute
-apples per tree
-computers produced per hour