ABSOLUTE ADVANTAGE

-Individual: exists when a person can produce more of a certain good/service than someone else in the same amount of time or can produce a good using the least amount of resources.
-National: exists when a country can produce more of a good/service than another country in a given time.

COMPARATIVE ADVANTAGE

-A person has a comparative advantage in the production of a product when it can produce at a lower domestic opportunity cost than a trading partner.

EXAMPLES OF OUTPUT

Tons/acres
Miles/gallon
Apples/tree
Televisions produced per hour

EXAMPLES OF INPUT

Number of hours to do a job.
Number of acres to feed a horse
Number of gallons of paint to paint a house

SPECIALIZATION AND TRADE

-Gains from trade are based on comparative advantage not absolute advantage.