Principles of Microeconomics/Microeconomic Principles/Economic Models

Comparative advantage vs. absolute advantage
This model is an application of the production possibility frontier studied in the previous section, albeit in a global set-up. In this subunit, we will bring the argument for international trade, specialization, comparative advantage, and the resulting economic growth to light. The mechanics of comparative advantage will reveal why it would benefit a country to import goods it produces at home.

Analyzing advantage
Absolute and comparative advantage is a difficult topic. This quiz challenges you to use analytical reasoning to explore what absolute advantage and comparative advantage actually mean, what opportunity costs are, and the real choices that national economies have to make.