Absolute Advantage and Comparative Advantage (with examples) | International Business

The United States is one of the wealthiest nations in the world, yet we continue to trade with other countries. Have you ever wondered why this is the case? If the U.S. is so powerful, then how does it benefit from international trade? To answer this question, we need to understand two important terms in the international business field: the absolute advantage and the comparative advantage.

[lukeyoder]

Comparative and absolute advantage has always been a struggle point for me, vaguely understanding the concept but not being able to fully grasp it. Diving into comparative advantage, the example with the U.S and China and giving a good example of the opportunity cosy truly helped me understand the difference between the two.

[coltonndb]

This was probably my favorite video from this semester because this is something I didn't quite understand as well as I should have coming out of a couple of economics classes. The simplification of the meanings of each along with examples with actual calculations allowed me to wrap my mind around the idea of what each advantage means as well as why it means that.

[delanceytorres]

When I was in economics, I remember struggling with comparative and absolute advantage. I wish I'd seen this video back then! This provided a better visual and example, which helped me understand better than before. Learning about opportunity cost is critical because it can assist in selecting the best option, allowing one to select what may be the most effective and tactically available option for their situation.

[kristencwilson]

After taking an economics class the last 2 semesters I had a pretty good understanding for absolute advantage and comparative advantage but this video put it in a different way that helped me understand it better. I think the simplified examples really aided in my further understanding of the topic.

[huntergwin]

I think the differences between comparative and absolute advantage are easily explained and understood through this video, the author does a fantastic job distinguishing the two and making great points as to what they mean. Opportunity cost is something I have struggled with, but understanding it is just what you are giving up to achieve something else really helped!

[danielgragg]

I have taken three economics classes, and I think that I understood more in this video than those three classes about comparative and absolute advantage.

[lindseyhill]

This video is perfect for those having difficulty in this topic. Dr. yang discusses absolute and comparative advantages in a clear and professional way for all students/learners to understand!

[lisandraibarra]

The video did a great job explaining absolute and comparative advantage. I have enjoyed these videos because of the illustrations they really help understand the topic. What I have learned is that absolute advantage refers to a country's ability to produce a good more efficiently than others, while comparative advantage is about producing goods at a lower opportunity cost.

[brianshine]

The reason this video is intriguing is that it gets you to consider the trade networks that support contemporary society. It highlights the various ways in which an advantage can be gained and the leverage that results from possessing an absolute advantage. Even though one nation may have an abundance of a certain resource, another nation may benefit from laxer labor laws that increase productivity.

[kyndelfuller]

This video is such a good clarification because I tend to get absolute advantage confused with comparative advantage. I am quickly reminded of “more efficient” to correlate with absolute advantage and “lower opportunity cost” for comparative advantage. The examples in this video also help break down what those sayings even mean and they helped me to remember which goes with which.

[haileysheffield]

Absolute and Comparative Advantage is another topic I learned about in my economics class. I enjoyed learning about it again, as I enjoyed learning about it in my economics classes. It was interesting to learn how powerful the United States is and how it benefits from international trade.

[avasteinman]

I chose this video to make a comment on because I learned this topic in my economics class and it really changed the way I thought about decisions I had to make in my everyday life. I really enjoy math and psychology and the idea of comparative advantage really involves both those factors. Ever since I learned about the concept of opportunity cost I consider it in all decisions I make. There is cost to every decision you make, you just have to see if the benefit out weighs the cost.

[kastonmason]

I just recently learned about comparative and absolute advantage last semester in economics and probably one of my favorite things ive learned about this year.

[jacobyschunatz]

This video reminded me of my previous two semesters of accounting and economics classes. They explained it a lot less enthusiastically than here and seeing it in media form definitely reinforced the concepts for me, had I seen this previously, it would have been very useful to me.

[diegoarenal]

I particularly liked this video because I have never learned about absolute and comparative advantage. It is clear given the geographic location countries have more advantages than others and it talks about fairness and justice.

[jamiebowden]

This video clarified aboslute and comparative advantage better than many I have seen, especially the formulas. I appreciate the simplicity of these videos that allow for better understanding.

[isaiahsanborn]

The visuals in this video really helped me understand this concept. I used to have trouble understanding comparative and absolute advantage in high school, but this video made it more clear.

[coleteichgraeber]

I really enjoyed hot this video broke down the differences between comparative and absolute advantage. It had been a while since I had learned about this in economic so it was a great refresher.

[emilymac]

I remember struggling with comparative and absolute advantage when learning this in economics. How I wish I would have seen this video then! This gave both a better visual and example that helped me understand better than I did before. Learning about opportunity cost is so important as it can help choose the best option, thus allowing one to choose what might be the most effective and tactical available option for their situation.

[sierralang]

A soulmate advantage and comparative advantage were always an easy mix up for me. Seeing the visualization along with the calculations helped me better understand the difference between each advantage. I also better understood how even though a county is trading “more for less” they are still benefitting from the trade because of the comparative advantage.