Skip to main content

Posts

Showing posts from December, 2018

Unit 1, Lesson 6A: Absolute and Comparative Advantage

This lesson on absolute and comparative advantage will be on the Basic Economic Concepts portion of the AP examination(s). Different countries have different resources, causing them to have different production possibilities, as learned in past lessons. Thus, comparing different countries will demonstrate that certain countries will be better or worse at producing certain products than other countries. For instance, let us say that Countries A and B both produce apple juice and orange juice. Here are the production possibilities for Country A, given their current resources: Here are the production possibilities for Country B, given their current resources: When glancing at the production possibilities of both countries, it is evident that Country A produces more apple juice than Country B when given the same amount of resources. Therefore, Country A has an absolute advantage in the production of apple juice. Likewise, Country B produces more orange juice than C