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Comparative Advantage Calculator

Enter the output or labor input of two goods for two countries to find each country's opportunity cost and see which country holds the comparative advantage in each good.

Input

Type of value to enter

Enter how many units of each good can be produced with the same amount of resources. A higher number is judged as higher productivity.

Country A (output from a fixed amount of resources)

Country B (output from a fixed amount of resources)

Result

Comparative advantage verdict

Good X → Country A

Good Y → Country B

If Country A specializes in Good X and Country B specializes in Good Y and they trade, both countries gain.

Comparative advantage in Good X

Country A

Comparative advantage in Good Y

Country B

Opportunity cost (amount of the other good given up to make one unit of this good)

CountryOpportunity cost of 1 unit of Good X (in Good Y)Opportunity cost of 1 unit of Good Y (in Good X)
Country A0.81.25
Country B1.50.667

The country with the lower opportunity cost holds the comparative advantage in that good.

How it works

  • From the production data of two countries and two goods, this tool determines which good each country has a comparative advantage in. It supports both an output mode and a labor-input mode.
  • Opportunity cost is the amount of one good you give up to produce one more unit of another good. In output mode, the opportunity cost of Good X equals Good Y output divided by Good X output; in labor-input mode, the opportunity cost of Good X equals Good X input divided by Good Y input.
  • A country whose opportunity cost for a good is lower than the other country's holds the comparative advantage in that good. When each country specializes in the good it has a comparative advantage in and they trade, both countries gain.
  • Unlike absolute advantage (simply being more productive), comparative advantage is determined by comparing opportunity costs. Even if one country has an absolute advantage in both goods, the comparative advantage is always split between the two countries.
  • The results display each country's opportunity cost in a table and show which country should specialize in which good.
  • Note: This tool is a simplified educational model based on Ricardian comparative advantage. Real-world trade is affected by many factors such as transport costs, tariffs, and economies of scale.