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The mental model from economics that is widely misinterpreted is comparative advantage. Most think it means you/a country etc should specialize in that which
by jtlien1 10y ago
The mental model from economics that is widely misinterpreted is comparative advantage. Most think it means you/a country etc should specialize in that which you are best at. And then free trade will work to your advantage. But it actually means that even if you are worse at producing products A and B than another country, if your ratio of A/B is better than the other country, it would be good for you to produce A and trade it to the other country for B etc. I