Comparative Advantage Practice
Two islanders, one question: who should make what? Work through the two-step method below, step through the graph, then answer five exam-style questions on opportunity cost, specialization, and terms of trade.
One tile of the full basic economic concepts unit.
The course teaches basic economic concepts interactively — drag the graphs, practice with feedback, and spaced reviews bring it back before you forget. Free.
The setup, and the two-step method
Ana can catch 20 fish or pick 10 coconuts in a day. Ben, nursing an injury, can manage only 4 fish or 8 coconuts. Ana is better at both — so should Ben just stay home? Comparative advantage says no, and the method is always the same:
- Compute each producer's opportunity cost of one unit of each good: what they give up, divided by what they get.
- Give each good to the producer with the lower opportunity cost. Absolute advantage (who makes more) never enters the decision.
| Cost of 1 fish | Cost of 1 coconut | Comparative advantage | |
|---|---|---|---|
| Ana | 10 ÷ 20 = 0.5 coconuts | 20 ÷ 10 = 2 fish | Fish |
| Ben | 8 ÷ 4 = 2 coconuts | 4 ÷ 8 = 0.5 fish | Coconuts |
Any trade price between the two opportunity costs — more than 0.5 and less than 2 coconuts per fish — makes both of them better off. The graph below builds exactly this case, one step at a time.
Interactive graph
Use the step buttons under the graph. Each step adds one piece of the story: Ben's curve, his no-trade bundle, Ana, the trade price, and finally the gains from trade.
Five practice questions
Pick an answer, then click Check answer to see the explanation.
Question 1 of 5
In one hour, Ana can bake 12 loaves of bread or make 4 cakes. Her opportunity cost of one cake is:
Question 2 of 5
Country A can produce more of both wheat and cloth than Country B with the same resources. Which statement is correct?
Question 3 of 5
For Maria, one truck of corn costs 2 trucks of soybeans to produce. For Jonas, one truck of corn costs 5 trucks of soybeans. Which trade price for corn would make both better off?
Question 4 of 5
After two countries specialize according to comparative advantage and trade, what happens on their production possibilities curves?
Question 5 of 5
Comparative advantage says specialization should be based on:
What the course adds
Beyond this one page
The basic-economic-concepts unit has dozens of practice questions on opportunity cost, the PPC, comparative advantage, and gains from trade. Each session pulls from your weak spots — not the same five questions every time.
Spaced reviews
FSRS brings every concept back right before you'd forget. ~50% better retention than re-reading.
Per-concept mastery
Performance Factor Analysis tracks each sub-skill separately — you see which version of the idea is still wobbly.
Diagnostic placement
A short test skips you past what you already know. No re-learning the basics.
For instructors
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The full Econ Academy basic-economic-concepts unit includes adaptive practice, spaced repetition, and mastery tracking so you stop forgetting what you just learned.