Comparative Advantage | A-Level Economics Notes
These revision notes cover everything you need to know about Comparative Advantage for A-Level Economics. They're designed for students studying AQA A-Level Economics, Edexcel A-Level Economics, and Edexcel International A-Level Economics. Written by Jaisul Naik, UCL Economics graduate and A-Level Economics tutor since 2017.
What is absolute advantage?
Absolute advantage is when a country is able to produce a good or service at a lower cost than another country.
What is comparative advantage?
Comparative advantage is when a country is able to produce a good or service at a lower opportunity cost than another country.
Comparative advantage diagram
How do you calculate opportunity cost from a PPF?
Form a ratio of good A: good B
Simplify the ratio in the form 1:n
What is Country B's opportunity cost when producing a laptop? Use the diagram above
Country B can produce 50 laptops if they give up 90 units of food.
So the opportunity cost for 1 laptop is 1.8 units of food.