ECONOMICS BU 204 – Absolute and comparative advantages differ in both meaning and importance

Unit 2: JournalJournal entry questions are related to the application of the key concepts you learn to the real-world economic issues. The questions contain key economic principles and ideas related to the Macroeconomics topics you are learning. Please feel free to express your perspectives and state how the economic principles and ideas affect your economic decision making process. You should note that there is a limit to the number of words for the Journal entry. You can only enter the maximum 400 words.Title your Journal entry: Unit 2 JournalTitle your Journal entry: Unit 2 JournalJournalAbsolute and comparative advantages differ in both meaning and importance. An individual or a country may have absolute advantages in producing several products and services whereas others may have comparative advantages. Give an example in which one person has absolute advantages in doing two things but another person has a comparative advantage in doing one of the tasks. Will both individuals benefit if they specialize in a task based on their comparative advantage and engage in trade? Why?The circular flow diagram shows us how economic agents interact in various markets once the economic decisions (choices) are made. As an economic agent, in which market do you participate in the circular flow diagram? How does the flow diagram help you understand the roles of the economic agents in the market?