Absolute & Comparative Advantage

Absolute & Comparative Advantage

Courses Info
Exam Boards: Edexcel, AQA, WJEC, CIE, OCR         Level: AS/A LEVELS/IB/IAL

Absolute Advantage

Absolute advantage occurs when a country can produce a particular good or service more efficiently than another.

e.g. The OPEC countries can produce oil a lot more efficiently than other countries who have not supplied this commodity before. Columbia is known to produce coffee more efficiently than some of the developed countries of the world such as the U.K.

Comparative Advantage

Comparative advantage occurs when a country can produce a good or service at a lower opportunity cost than another.

 

Tushar Depala

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