CH 21: Comparative Advantage Discussion
You may want to refer to the International Trade chapter in your book for a deeper understanding of the Law of Comparative Advantage.
When we talk about world trade often countries will use the concept of “comparative advantage” and trade to make everyone better off.
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1. In your own words, provide an example of the Law of Comparative Advantage that you see/observe in the economy.
2. How is this different than Absolute Advantage?
3. In addition, please provide a REAL “personal” example of how the Law of Comparative Advantage applies to you individually. (For example, I have a comparative advantage in economics and my accountant has a comparative advantage in accounting. Therefore, I hire an accountant to do my taxes. WHY???) Think outside of the box here…
Please comment on 2 other postings…comment on their explanation and example. Did it adequately illustrate the concept? Is this something your professor could use in future classes to explain comparative advantage.