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