comparative advantage

The economic principle that countries (or individuals) benefit from trade by specialising in producing goods where they have the lowest opportunity cost — even if one country is more efficient at producing everything.

• (compound economic term)

• theory of comparative advantage
• comparative advantage in trade
• exploit comparative advantage
• Ricardo's comparative advantage

1. 1.Even if a surgeon is faster at both surgery and typing than their secretary, they still benefit from hiring the secretary — the surgeon's comparative advantage is in surgery because the opportunity cost of typing (time not spent operating) is enormous. (opportunity cost logic)
2. 2.China's comparative advantage in manufacturing stems not just from low labour costs but from infrastructure, scale, and supply chain density — a cluster of advantages that reinforces itself. (trade specialisation)

• relative efficiency (being relatively better at one thing)
• specialisation advantage (the benefit of focusing on what you do best relatively)

"comparative" from Latin "comparare" (to pair, to match) + "advantage" from French "avantage" (from "avant," before) — the advantage found by comparing