6.4 COMPARATIVE ADVANTAGE 冷 absolute advantage oo the comparison among producers of a good according to their productivity Opportunity Cost os whatever must be given up to obtain some item s Comparative Advantage os the comparison among producers of a good according to their opportunity cost oo Farmer: 1 oz meat =3 oz potatoes(OC=4 OZ oo Rancher: 1 oz potato= 1/3 oz meat(OC=1/2 oz) o Trade can benefit everyone in society because it allows people to specialize in activities in which they have a comparative advantage6.4 COMPARATIVE ADVANTAGE ❖ absolute advantage  the comparison among producers of a good according to their productivity ❖ Opportunity Cost  whatever must be given up to obtain some item ❖ Comparative Advantage  the comparison among producers of a good according to their opportunity cost  Farmer: 1 oz meat = 3 oz potatoes (OC=4 oz)  Rancher: 1 oz potato = 1/3 oz meat (OC=1/2 oz) ❖ Trade can benefit everyone in society because it allows people to specialize in activities in which they have a comparative advantage