Comparative Advantage Calculator

Formula

The formula to calculate the Comparative Advantage is:

\[ \text{CA} = \frac{A}{B} \]

Where:

\( \text{CA} \) is the Comparative Advantage
\( A \) is the quantity of raw material in country A
\( B \) is the quantity of raw material in country B

What is Comparative Advantage?

A comparative advantage is a measure of the monetary advantage a country has over another country due to its natural resources. It reflects the ability of a country to produce a good at a lower opportunity cost compared to another country.

Example Calculation

Let's assume the following values:

Quantity in Country A: 100 units
Quantity in Country B: 50 units

Using the formula to calculate the Comparative Advantage:

\[ \text{CA} = \frac{100}{50} = 2 \]

The Comparative Advantage (CA) is 2, indicating that Country A has a comparative advantage over Country B.