Economics · Micro
Comparative advantage & trade
Ricardo's counterintuitive insight: even if one country is better at everything, both gain by specializing in what they're relatively best at and trading. The foundation of globalization, and of how teams should split work.
Step 1 of 7 · Overview30 min read ·
Key idea
Prereqs: Opportunity cost, Supply & demand. Next: Market failures & externalities. Marginal Revolution University 'Comparative Advantage'; David Ricardo (1817).Next: 1. Absolute vs comparative advantage