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# Input approach to determining comparative advantage

In this video, we take a slightly different approach to determining comparative advantage because we are given data in a slightly different way. Rather than knowing how much of two goods can be produced in a day, we know how much of a resources (in this case labor) is needed to produce one unit of a good.

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• There is a quicker way to calculate opportunity costs for an opportunity cost table. And without assumptions about how long people work.

For an example, if you want to calculate the opportunity cost of belts in country B (in terms of toys cars sacrificed per one belt), then take time cost of producing 1 belt and divide it by time cost of producing toy cars in country B. In this example it's 3/4 toy cars.

If you want to calculate the opportunity cost of producing toy cars in country B (in terms of belts), then divide time cost of producing belts in country B by time cost of producing cars in country B. In this case it's 4/3 belts (in other words, it's 1 1/3 belts).
• Yes, everyone use this please. I have posted my comment on this in the "Tips and Thanks" comments section. So if you don't understand what is being talked about here use the resources I referenced in that comment.
• At you say multiply both sides by 3/8. Why do you do that?
(1 vote)
• 2c = 8/3b

He's actually dividing 8/3. And what do you do to divide fractions? As one of my math teachers use to say, flip it and change it! 8/3 becomes 3/8 and division because multiplication. That's why he's multiplying by 3/8, he did the "flip it and change it" in his head.
• How do you determine the optimal trade for both counties?
• The video before this "Terms of trade and the gains from trade" explains this.
• Lol the cold below/above the waist thing
• at im so confused by the 3/8 x 2c=8/3b x 3/8

i understand the flip and change rule for dividing fractions but i dont know why he did the "times 3/8" at the end
• How does using the amount of labor required to produce one unit of a good help us determine comparative advantage in a different way?
• When solving for the Opp Cost, I was doing it in decimals and had the cost for B to make Belts be 2/2.6=.769. However, Sal ends up with 3/4 which is .75. What approach would be most exact, and what is most likely to be the system used on a college Econ Placement test? Fractions or Decimals?
(1 vote)
• Hi everyone! Could someone enlighten me on this please? Thank you sm :)

"How can country B have the comparative advantage in toy cars even though country A has the absolute advantage (more efficient in its production) because of opportunity cost?"
(1 vote)
• In absolute advantage, we deal with one product. But in Comparative Adv we count other product too. Suppose, A produces 3 belts 3 cars. But B produces 5 belts and 15 cars. Now OC for B is 1 belt = 3 cars, if B could produce 10 cars then OC is 1b= 2c . Now look B has always absolute Adv in belt(5>3) but its Comparative Adv is changing with the number of another product(car) it can produce and we have to compare it to the OC of country A. Thus we decide Comparative adv.
(1 vote)
• country A has C.A in toy cars
2b < (8/3)b
(1 vote)
• Why does it make sense for an entity to specialise in producing a good that they have a comparative advantage in? Especially given that in the real world goods don't have equal value
(1 vote)