We generally talk about comparative advantage with
reference to countries rather than individuals, but individuals could be used to
illustrate this theory as well.
If Person A has a lower
opportunity cost for making a good than Person B, Person A has a comparative advantage
in terms of that good. Person A should make that good and Person B should buy it from
him/her.
The reason for this is that it is in Person B's
best interests to buy that good from Person A even if Person B could make it him/her
self. If Person B buys this good from Person A, B can use the time and resources she
saved (by not making the good) to make something that is more valuable. Person B could
then sell that more valuable good to Person A and both will be better
off.
To fully understand this, it is really useful to look
at a chart showing opportunity costs for different people and different goods. You can
click href="http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=comparative+advantage">here
to find such a chart.
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