numerical and diagrammatic analysis of A/C adv

Cards (2)

  • example of numerical advantage of absolute advantage
    Spain has absolute advantage in both but if specialised they produce much more.
    UK has comparative advantage in cars only 1/3 worse at producing cars and ½ as good at producing wine so they should specialise in cars.
    Spain should produce umbrellas (80%) and produce some cars.
    increase in total production in both cars and
    umbrellas.
  • example of absolute advantage with Spain and the UK