Absolute Advantage vs. Comparative Advantage

Now that we've learned about specialization, we are ready to learn about absolute advantage and comparative advantage. This is something that can help an individual, company, or country determine what is in their best interests to produce, by examining opportunity costs. This also leads to the concept of interdependence, which ties in with exports and imports, as we've already discussed. Take a look!

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[humanbeing]

This is my only schooling I voluntarily attend ever since I left college. Thank you for bringing us knowledge.

[Alexander-erje]

I hope you are incredibly rich off of these videos, they are so informative, never stop

[glennpearson]

I think Professor Dave has both absolute and comparative advantage over any other educational YouTube channel. Nicely done.

[mikefochtman]

Great video. The economist Steven Landsburg has a book where he shows that even if 'Harry' can make BOTH products faster than Lloyd, there can still be advantages to them cooperating (he uses an example of a carpenter and electrician). It's not always obvious, but using the opportunity costs of each, we can find the optimal ratio of both products produced by each.

[nupurupadhyay]

Absolutely incredible 👌 my opportunity cost for skipping the lectures in my collage is extremely lower than my opportunity cost for watching this video . I'd always trade you-tube for collage 😆

[srijaniray]

I'm a student from India, pursuing Chartered Accountancy, and this video was a boon for me. Thanks a lot. Keep up the good work❤❤

[胡高平]

You're so good at explaining what you're talking about. You're great.

[sciencenerd]

I love how they are named Harry and Lloyd

[Omniscient]

All my high school life, I thought he was a science teacher. Now I'm in university studying a commerce subject and he's still my teacher.

[aanchalsingh]

My 1st language is not even English, but he explains in such a simple way that I understand it . Thankyou

[jalilahp.mimbantas]

Thank you, professor! This helps me enlightened about those absolute and comparative advantages.

[universeusa]

Professor Dave, you really make think, and I love thinking. 🤔🙏

[SuPaMaNallday]

I’m just becoming aware of this channel. Professor Dave, I think you might be a genius communicator bro. Subscribed.

[FrankDigital]

Many questions I’ve had have been answered, as always. Thanks Professor Dave.

[thorns]

A philosophical question:

Where does one economy being and another end?

Individuals?
Companies?
Nations?
Regions?
Farms?

There is also an overlapping web of codependant interacting economies.

For example:
If I live in an area of country A that has an opportunity cost for growing coffee that is five tons of sugar, I can compete with the sugar imports from country B, even if my country on average can't.

Which is why most countries have at least some production of food, not only the lofty goal of "not depending on the international market".

Then we have subsidies and other external economic factors, that ruin the model.

[aknklc]

*Thanks Prof Dave, have a nice day to everyone, and healthy.*

[aravindnarayanan]

Great explaining, loved your voice and awesome visuals and editing. Thank you for this wonderful vid:)

[AryanSharma-khzw]

Hey Professor, I checked out your Economics playlist and there are some videos private... are they supposed to be published or did you forget to remove them?

[WanderTheNomad]

Wow, this was a blast from the past from my highschool economics class.

[jean-jacquesyonnet]

Love the intro…appreciates the presentation…clear & easy to understand !!! Thanks !!!