Microeconomics › Section S · International trade › Topic S.1
Absolute and comparative advantage
Countries trade for the same reason people do: nobody is best at making everything, and what you give up to make something matters more than how fast you make it. This topic turns that idea into numbers you can calculate.
In this topic
- Why countries trade
- Absolute advantage
- Comparative advantage
- Worked example: hours per unit
- Two kinds of table
- Straight-line frontiers
- Worked example: gains from trade
- The terms of trade
- Where comparative advantage comes from
- Common mistakes to avoid
- Key takeaways
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