Comparative advantage
What Comparative advantage means in Economics A-Level, as defined for AQA, Pearson Edexcel.
Definitions of Comparative advantage
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Reference: AQA
Exists when a country produces a good at a lower opportunity cost than its trading partner.
Producing goods with lower opportunity costs, so that global resource allocation improves.
Occurs when a country produces a good at a lower opportunity cost than another.
The ability to produce a good at a lower opportunity cost than another country.
The ability of an agent to produce a particular good or service at a lower opportunity cost than its trading partners.
Topics that use Comparative advantage
- Trade (AQA A-Level)
- International economics (Pearson Edexcel A-Level)
Related terms
- Terms of trade
- Current account
- Deadweight welfare loss
- Economic efficiency
- Economic integration
- Economies of scale
- Export subsidies
- Gains from trade
Using Comparative advantage in the exam
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