Absolute Advantage v. Comparative Advantage

Class,

On Thursday we will have a quiz on section 1 of Chapter 4. The main focus in the chapter, thus far, has been: Trade, Opportunity Cost, Absolute and Comparative Advantage.

As a follow-up to today's lesson:
When we are comparing two issues:
Cars v. Cheese: take the focal point and put it over the comparative item. If we are looking at the country with the comparative advantage in production of cars, from today's lesson, then:

USA : 15hrs to produce 1 car/5hrs to produce 1 ton of cheese = an Opportunity Cost of 3 tons of cheese.
China: 4 hrs to produce 1 car/2 hrs to produce 1 ton of cheese = an Opportunity Cost of 2 tons of cheese.
Therefore: China has the Comparative advantage in the production of cars. (China gives up fewer units of chesse, when producing cars.)

To find the comparative advantage of production of cheese, simply reverse the numbers.

Questions? Thoughts? Concerns?

Thank you to my Lance Armstrong, Typist, Chef & Cleaner for your participation in class.

C.A.N. I.!

Mr. Brannick