What is Comparative Advantage? What is Absolute Advantage? Which one is better?

Comparative advantage is a concept in economics that indicates the advantage that one party has over another in producing a particular good or service at a lower opportunity cost.

Absolute advantage is the ability of one country or individual to produce a good or service more efficiently than another.

Comparative advantage is a more useful concept in international trade and economics than absolute advantage as it allows countries to specialize in production and engage in mutually beneficial trade.

An example of comparative advantage is the United States having a comparative advantage in producing wheat because it can produce it more efficiently than other countries.

An example of absolute advantage is China being able to produce steel more efficiently than other countries.

Comparative advantage is more beneficial than absolute advantage as it allows for specialization and mutually beneficial trade.

Comparative advantage allows countries to concentrate on certain industries and outsource the production of other goods to countries with a more efficient production process.

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