absolute productivity disadvantage is relatively smaller. The United States can produce 1,000 shoes with four-

fifths as many workers as Mexico (four versus five), but it can produce 1,000 refrigerators with only one-

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19.2 • What Happens When a Country Has an Absolute Advantage in All Goods 457

quarter as many workers (one versus four). So, the comparative advantage of the United States, where its

absolute productivity advantage is relatively greatest, lies with refrigerators, and Mexico’s comparative

advantage, where its absolute productivity disadvantage is least, is in the production of shoes.

Mutually Beneficial Trade with Comparative Advantage

When nations increase production in their area of comparative advantage and trade with each other, both

countries can benefit. Again, the production possibility frontier is a useful tool to visualize this benefit.
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