Comparative Advantage Practice

  • Published on Aug 29, 2017
  • If you want to skip the lesson and just practice go to 10:48. I spend the first have of the video explaining how to identify which country has an absolute advantage, calculate opportunity cost, identify which country has a comparative advantage, and find a terms of trade that both countries would voluntarily agree to. The second half of the video is an additional practice questions where I quickly go over the answers. I also added the answers below if you are in a hurry. Thank you for watching, please subscribe.
    Additional Multiple Choice Questions
    Unit 1 Summary Video (includes quick and dirty trick)
    Situation #1 (5:30)
    The US can produce 20 planes or 2 cruise ships
    France can produce 12 planes or 2 cruise ships
    -The US has an ABSOLUTE ADVANTAGE in planes
    -Neither has an ABSOLUTE ADVANTAGE in cruise ships
    -For the US, 1 plane costs 1/10 cruise ship and 1 ship costs 10 planes
    -For France, 1 plane costs 1/6 cruise ship and 1 ship costs 6 planes
    -France has COMPARATIVE ADVANTAGE in cruise ships
    -Terms of trade: 1 Cruise Ship for 7 Planes
    Situation #2 (11:12)
    Korea can produce 3 cars or 9 motorcycles
    Germany can produce 4 cars or 8 motorcycles
    -Germany has an ABSOLUTE ADVANTAGE in cars
    -Korea has an ABSOLUTE ADVANTAGE in motorcycles
    -For Korea, 1 car costs 3 motorcycles and 1 motorcycle costs 1/3 car
    -For Germany, 1 car costs 2 motorcycles and 1 motorcycle costs 1/2 car
    -Germany has COMPARATIVE ADVANTAGE in cars
    -Korea has COMPARATIVE ADVANTAGE in motorcycles
    -Terms of trade: 1 Car for 2.5 Motorcycles

    Situation #3 (13:22)
    Japan can produce 4 laptops or 12 phones
    Brazil can produce 1 laptops or 5 phones
    -Japan has an ABSOLUTE ADVANTAGE in laptops
    -Japan has an ABSOLUTE ADVANTAGE in phones
    -For Japan, 1 laptop costs 3 phones and 1 phone costs 1/3 laptop
    -For Brazil, 1 laptop costs 5 phones and 1 phone costs 1/5 laptop
    -Japan has COMPARATIVE ADVANTAGE in laptops
    -Brazil has COMPARATIVE ADVANTAGE in phones
    -Terms of trade: 1 Laptop for 4 Phones
    Situation #4 (16:08)
    Cuba takes 4hrs to make a TV and 12hrs to make salsa
    Mexico takes 1hr to make a TV and 5hrs to make salsa
    -Mexico has an ABSOLUTE ADVANTAGE in TVs
    -Mexico has an ABSOLUTE ADVANTAGE in Salsa
    -For Cuba, 1 TV costs 1/3 salsa and 1 salsa costs 3 TVs
    -For Mexico, 1 TV costs 1/5 salsa and 1 salsa costs 5 TVs
    -Cuba has COMPARATIVE ADVANTAGE in salsa
    -Terms of trade: 1 salsa for 2.5 TVs
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Comments • 321

  • james mbroh
    james mbroh 7 days ago

    best video for this concept

  • Manuela Dongmo
    Manuela Dongmo 9 days ago

    your are the best

  • Manuela Dongmo
    Manuela Dongmo 9 days ago

    hi my name is manuela and i'm from africa , i like your videos please can you send me some test question i want to know my level in eco THANK

  • Abdalle Mohamud
    Abdalle Mohamud 11 days ago

    thnk your mr teacher really l got, salute from somalia

  • Clara Wolf
    Clara Wolf 15 days ago

    thank you so much....

  • UgandanTurtle
    UgandanTurtle 15 days ago +1

    this vid taught be more in 19 minutes than an hour long class. i love your vids man they're amazing

  • Ricky Harper
    Ricky Harper 20 days ago

    Thank you. Way better explanation than my prof.

  • Arzu Huseynzade
    Arzu Huseynzade 26 days ago

    I stumbled upon this video while preparing for my International Business midterm in University (my final year). And it reminded me of how much your videos helped me during my first year, when I was just a freshman struggling to grasp concepts of micro and macro economics. Thank you so much, Jacob for making this information so accessible and understable! I trully appreciate your work, and really enjoy your lively and interesting take on these subjects!
    P.S. Did you re-brand your youtube channel? Because I distinctly remember the ACDC belt that you had, if my memory serves me right.

    • Manuela Dongmo
      Manuela Dongmo 9 days ago

      hi i also study business at the university and these videos help me a lot

  • Yung Scoobs
    Yung Scoobs 26 days ago

    So if output questions are Cost/Gain are input questions Gain/Cost?

  • samantha foster
    samantha foster 26 days ago

    Thank you so much for helping me to understand this concept. I sat in class for 3 hours and understood nothing, got 1 hours extra lesson and was completlely clueless. This video made me understand the entire concept. keep up the good work!

  • Ruwan Lakshitha
    Ruwan Lakshitha 28 days ago +1

    Thank You !!

  • Tiffany Adler
    Tiffany Adler Month ago

    So helpful thank you

  • Garrett Ludescher
    Garrett Ludescher Month ago

    on the gang, thanks

  • Katie S
    Katie S Month ago

    I fucking died at 12.54 - 12.59 XD XD XD

  • Haley Kamp
    Haley Kamp Month ago

    omg this video helped me so much!! THANK U THANK U THANK U!!!

  • Divan Blignaut
    Divan Blignaut Month ago

    super helpful!

  • Carlos Cao
    Carlos Cao Month ago

    Thank you so much for the **per unit opportunity cost**, I used to think about total opportunity cost, which confused me for a few hours. Thank you very much.

  • Omnipresent
    Omnipresent Month ago +1

    golly those memes were dated

  • 7SF504
    7SF504 Month ago

    extremely helpful Jacob!

  • Muthukumar Narayanan

    thank you Jacob.

  • Abobakr Obad
    Abobakr Obad Month ago

    ECON216, UOWD students, HIGH FIVE(;

  • Fred Johnston
    Fred Johnston Month ago

    I just wanted to say a HUGE thank you Jacob. I always did in my brain in High School and at College (Uni over here in Australia) and now I'm trying to teach comparative advantage in High School!!! I never had it explained to me as simply as you have. BIG thumbs up to you!!

  • Akshat Juneja
    Akshat Juneja Month ago

    You are the GOAT of ECON, thx so much for making these!!

  • Yonela Notshe
    Yonela Notshe Month ago

    Your videos are the best I never write exam without visiting them...they are simple and helpfull

  • Toni Borras
    Toni Borras 2 months ago +1

    I am a hs business teacher and majored in Marketing. I took only the intro micro and macro econ classes in college and I swear to God, I had never heard of comparative advantage before. Did I sleep through class? I made A's in both, so I must have learned this somewhere at some time. However, I have to teach it to my students and I simply didn't understand what it was. You have made it so simple to understand. This was very helpful. I imagine I'll watch it over several times until I "get it". Thank you for your help.

  • Ahmad Khalid
    Ahmad Khalid 2 months ago

    your examples can teach every confusion .and one more thing ... good work men thanku so much

  • Andrei Guban
    Andrei Guban 2 months ago

    Thank you so much for doing this video. You're helping so many students like me for our academics. Please keep it up and continue helping not just more students but more people that wants to learn economics

  • Abel Ramirez
    Abel Ramirez 2 months ago

    super helpful, much more simplified and right to the point with detailed instructions love what you are doing. Keep it up!!

  • JesusBreastMilk
    JesusBreastMilk 2 months ago

    and women

  • natalie
    natalie 2 months ago

    thank you so much, you're a lifesaver !!

  • navaneeth sunny
    navaneeth sunny 2 months ago

    I understood this better than Jacob Clifford did. thank u- Jacob

  • Howie Daubenspeck
    Howie Daubenspeck 2 months ago

    I've taken Micro and now I'm taking Macro and this video in eight minutes helped me understand comparative advantage more clearly than anything i've tried previous. Thanks

  • sandra cepero
    sandra cepero 2 months ago

    wouldnt france have a comparative advantage in planes because it has a lower opp. cost?

  • Maria Atikah Abdullah
    Maria Atikah Abdullah 2 months ago +1

    2 years later, and u sir managed to save a 4th sem student.

  • Øļîvïå Pąűľ
    Øļîvïå Pąűľ 2 months ago +1

    Very helpful thank you :)

  • Chris Wooley
    Chris Wooley 2 months ago +2

    This is helpful! Im taking an online microeconomics class for my college and this is honestly my only resource for help, so thank you!

  • Selin Mammadova
    Selin Mammadova 2 months ago

    Thank you so much this is so helpful!!

  • Allissa Valenzuela
    Allissa Valenzuela 3 months ago

    I watched your videos as a high school senior in AP Macro and Micro. Now I'm a college student studying for the exams for my teaching certificate and I'm taking the subject test to teach econ so I'm watching your videos again to review!

  • vandoom1000
    vandoom1000 3 months ago

    absolutely brilliant video , thank you so much

  • Tars Tars
    Tars Tars 3 months ago

    This is how not to cause the Trade war

  • Jaymzz With a Z
    Jaymzz With a Z 4 months ago +1

    you're a miracle worker for us econ students Jake! i would be nothing without these videos. mad love!

  • Holly Becker
    Holly Becker 4 months ago

    I don't know what I'd do without your videos- thank you so much!

  • Anudeep Annangi
    Anudeep Annangi 4 months ago

    What do you do when there are 6 alternative choices? In other words, how would you do comparative advantage when two countries produce more than 2 things?

  • Christophe Lawson
    Christophe Lawson 4 months ago +1

    hey jacob im just a random kid from australia trying to pass year 12 atar your video on this concept was easy to understand and I now completely get it thanks a bunch

  • Sevara Amirkhamzaeva
    Sevara Amirkhamzaeva 4 months ago +38

    damn I can learn the concept in 10 mins while it takes 2 hrs for my lecturer to explain,
    university sucks

  • Nicholas Ramirez
    Nicholas Ramirez 4 months ago

    Thanks a lot for the help!

  • Heimkhemra Suy
    Heimkhemra Suy 5 months ago

    Many thanks!

  • Jenna Purcell
    Jenna Purcell 5 months ago

    Planning on taking the MIcroeconomics CLEP test and your videos have been very helpful!

  • Mangani Zulu
    Mangani Zulu 5 months ago +3

    very helpful information, I always search for your videos.

  • Basem Elgamal
    Basem Elgamal 5 months ago

    you said opportunity cost = Cost / gain ,,,,, I prefer making ( Gain of other product forgone / Gain of my product),, is it ok ?

  • Hermione Granger
    Hermione Granger 5 months ago

    My exam is tomorrow and this was my weak point. Thanks to Jacob, I have learnt it now!

  • Katie Palmer
    Katie Palmer 5 months ago


  • MaryHannah
    MaryHannah 5 months ago +1

    ok i was freaking out because i didnt know how to do this in class and i came here and have a better grasp on it. thank you so much!!!!

  • BaconMan
    BaconMan 5 months ago +1

    That Star Trek... WHO TAKES 12 HOURS TO MAKE SALSA meme was hella funny

  • Lin Zhuo
    Lin Zhuo 5 months ago +1

    You really explain wayyyy better than my ECO teacher! watching you videos are already enough for my exam preparation haha thankss!

  • ricauser ricauser
    ricauser ricauser 5 months ago +1


  • Vooryjoni Spion
    Vooryjoni Spion 6 months ago +5

    Japan has absolute advantage in Lolipops? lol

    GANESH KONDA 6 months ago

    All ur videos are great, it really helped me prepare for my AP

  • Shelby
    Shelby 6 months ago +4

    Here's how to get a 5 on the AP Exam: keep repeating the letters ACDC on your bubble sheet

  • Andrei Iliescu
    Andrei Iliescu 6 months ago

    Hello guys, one short question. Can you please explain why Japan, in the third example has the absolute advantage for both the laptops and phones? for laptop is obvious, but for the phones Japan has 1 laptop = 1/3 phones, while Brazil has 1 laptop=1/5 phones. 0.33>0.2. Isn't it an advantage for the one that pays less for the production?