Intuition behind Comparative Advantange?

Question

I already read and ask NOT about pp 52-54, *Principles of Microeconomics*, 7 Ed, 2014, by N Gregory Mankiw. I understand such numerical examples that corroborate Comparative Advantage, but how can I intuit comparative advantage? I wish to quash my need to revisit these numerical examples to recollect this idea. i start with definitions from pp 52 and 53 (supra):>**absolute advantage** = the ability to produce agood using fewer inputsthan another producer>**comparative advantage** = the ability to producea good at a loweropportunity cost thananother producerI read [this](http://internationalecon.com/Trade/Tch40/T40-0.php) by [Prof Steven M. Suranovic](http://economics.columbian.gwu.edu/steven-m-suranovic) and understand the gardening example, but still lack intuition. >First, ... comparative advantage is [clearly counter-intuitive](http://oecdinsights.org/2011/10/11/comparative-advantage-doing-what-you-do-best/). ... Secondly, the theory is easy to confuse with ... the theory of absolute advantage. The logic behind absolute advantage IS quite intuitive. This confusion between these two concepts leads many people to think that they understand comparative advantage when in fact, what they understand is absolute advantage.>However, instead of assuming, as Adam Smith did, that England is more productive in producing one good and Portugal is more productive in the other; [David] Ricardo assumed that Portugal was more productive in both goods. Based on Smith's intuition, then, it would seem that trade could not be advantageous, at least for England.

Answer 1

You have a comparative advantage in producing the good that you have the lowest opportunity cost to produce. The opportunity cost of producing a good is the best alternative use of one's time or other resources foregone in producing that good. So in a two-good world, the opportunity cost of producing each unit of one good is how many fewer units of the other good you can produce.

Now in a two-good world, the opportunity cost of producing one good will be the exact inverse of the opportunity cost of producing the other good. Why? If it costs you ten time as much labor or money to produce a unit of wine as it does to produce a unit of cloth, meaning the opportunity cost of wine is ten units of cloth, then it must cost one tenth as much to produce a unit of cloth as it does to produce a unit of wine.

Therefore, if Portugal has a comparative advantage in producing wine, it can not have a comparative advantage in producing cloth. It must have a higher opportunity cost to produce cloth because it has a lower opportunity cost to produce wine. England must be the cheapest, or lowest opportunity cost producer, of cloth. Both countries can consume more of both goods if Portugal specializes in wine and England in cloth.