Absolute and Comparative Advantage

Discussion 12: Absolute and Comparative Advantage

Suppose that the United States and Canada can each produce two products: lumber and beef. Create a table like the one below, showing labor requirements per unit of output for each country. (Hint: Choose numbers for each country that are easily divisible by one another.)

What does absolute advantage mean? How do you calculate absolute advantage? In what output(s) does the U.S. have an absolute advantage? Explain using the data from your table. In what output(s) does Canada have an absolute advantage? Explain using the data from your table.

What does comparative advantage mean? How do you calculate comparative advantage? In what output(s) does the U.S. have a comparative advantage? Explain using the data from your table. In what output(s) does Canada have a comparative advantage? Explain using the data from your table.

What product should each country export? Why?

Submission Requirements:

• The discussion grade will be based on how thorough and detailed your posts are.
• Your initial post must be published first, should be substantial, and answer the question(s) in detail.
• You must post at least TWO replies to other students’ posts. (replies – 0 each)
• Your replies must be a minimum of 5 sentences long and, again, must be meaningful and detailed.
• Proofread the content of your posts before making them public. Proper grammar and sentence structure are expected.

Review the rubric attached for how this discussion board will be assessed.