differentiate absolute advantage and comparative advantage?

Answer 1

Absolute advantage deals simply with how well you can perform an operation. If you can paint a fence in an hour, read 3 books in an hour, or cook 2 gourmet dinners in an hour, and your friend can paint 1/2 a fence in an hour, read 2 books in an hour, and cook 1 gourmet dinner in an hour, you have the absolute advantage in everything.

Comparative advantage, on the other hand, is more of an opportunity cost perspective. While it is true that you can do all things faster, your friend has less opportunity cost doing certain tasks than you do. For instance, in order for him to read 3 books, he only has to give up 1.5 gourmet dinners, while you have to give up 2. Thus, comparatively, he has the advantage in this task.

Hope this helps.

Answer 2

Try wikipedia for most definitions.
Both terms are mainly used in describing international trade. Both terms are used to compare the production capabilities of distinct groups of producers.