- Absolute Advantage: Who can produce more with the same resources and who can produce the same output with less resources.
ex. papa johns = absolute advantage produced more than the others vs. mcdonalds.
- Comparative Advantage: Who can produce the lowest opportunity cost.
ex. one nation/individual creating one thing and not the same.
INPUT VS. OUTPUT
Input: # of hours to do a job, # of gallons of paint to paint a house, # of acres to feed a horse.
( the question asking / the opp. )
Output: Miles per gallon, tons per acre, words per minute, apple per tree, computers produced per hour. (opp / what its asking )
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