Comparative Advantage vs. Absolute Advantage
It is also important to understand how comparative advantage differs from absolute advantage, another very important economic concept.
Absolute Advantage
Absolute advantage refers to when a party can produce more of a good or service with the same amount of resources than another party.
For instance, if country A is able to manufacture 100 tons of wheat with the same resources for which country B can make only 50 tons, then it means that there is an absolute advantage of producing wheat for country A.