Adapted from I Pencil, by Leonard Read, Foundation for Economic Education, 1958.

Comparative Advantage: A Model We’re going to explore the idea of comparative advantage and make it concrete by looking at a model economy with two smoothie bars: one operated by Liz and the other operated by Joe. You will see how we identify comparative advantage and how it creates an opportunity for Liz and Joe to gain from specialization and trade.

Liz’s Smoothie Bar