Comparative advantage is an important concept to explain how economies work. Because of comparative advantage, it is possible for people to use their skills and time productively even if they are not the best at something. To help illustrate the usefulness of this concept:
- Think of an example (work, family chores, school projects, etc.) where you might not have an absolute advantage at something, but you do have a comparative advantage. By this, I mean that you might not be the fastest or the best at a particular job. Other employees, family members, etc. may do the job quicker or better than you could. But their opportunity cost was high, meaning they had something more necessary for them to do, so it made sense for you to do this job.
- Explain how this was an example of you having a comparative advantage but not an absolute advantage.
- Did you (and the others in your example) specialize according to comparative advantage? What job(s) did you do? What did other people do?
- Did this result in a more efficient and more productive use of everyone’s time? Explain how.
- If you use any additional sources for this, don’t forget to cite them.