2.  A person has a comparative advantage at producing a product if they can produce it at a lower cost than others.  Everyone has a comparative advantage at something.  This is true because “lower cost” means the opportunity cost of producing something.

3.  A person is the best at producing something.  Just because someone has an absolute advantage it does not mean they have a comparative advantage.  Remember opportunity cost.

4.  “To find people’s comparative advantages, do not compare their absolute advantages. Compare their opportunity costs.”

5.  Jim can make 5 sales in a day. He can also type 10 memos in one day.  Pam can make 1 sale in a day. She can also type 25 memos in one day.  Who has the Absolute advantage in sales? Comparative? Why?  Who has the Absolute advantage in typing memos? Comparative? Why?

6.  Megan can make 8 dresses in a week. She can also make 5 pairs of pants in a week.  Allison can make 5 dresses in a week. She can also make 3 pairs of pants in a week.  Who has the Absolute advantage in dresses? Comparative? Why?  Who has the Absolute advantage in pants? Comparative? Why?

7.  Population: 30  Established: 2012  Businesses: 10  Goal: Have the best run businesses in the United States.

8.  Each student will get a certain card containing details about what they can produce at certain costs/ time constraints.  Each student will get into groups of three to make the best business.  At the end, the class should have a small town with well run businesses.

9.  Typed or Hand Written  1 Paragraph Essay  Prompt: Think of a time when comparative and absolute advantage was used to establish who would do what in your life. Explain how the situation fits.