Absolute advantage
- individual
Exist when a person can produce more of a certain good/ service than someone else in the same amount of time
-national
Exist when a country can produce more of a good/service than another country in the same time period
Comparative advantage
-exist when an individual or nation can produce a good/service at a lower opportunity cost than another nation or individual
Input problem vs output problem
Input- what can be produced using the least amount of resources." Land, or time"
Chosen item / forgone item
Output- deals with production. Lowest opportunity cost.
What they give up/ what is produced
Absolute advantage - faster
Comparative - lower opportunity cost
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