Gaining from Comparative Advantage
Production through partial or complete specialization can increase total output and with trade total consumption can also be increased
Glossary:
comparative advantage
In general, a worker or a country enjoys comparative advantage in producing a good or service if it can produce the good or service at a lower relative opportunity cost than another worker or country. In a two-goods (grapes and nuts) two-persons (Tom and Mary) economy, Tom would have comparative advantage in producing nuts if his opportunity cost of producing nuts in terms of grapes foregone is lower than Mary. In graphical terms, Tom's PPC (PPF) would have a flatter slope viewed from the nuts axis in the grapes-nuts space. But the intercept of Tom's PPC on the nuts axis need not be higher than that of Mary's PPC on the same axis.
