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Differences - Comparative and absolute advantage

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What is the difference between comparative and absolute advantage? Why is the answer to this question important to managers?

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The difference between comparative and absolute advantage is discussed in the solution.

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Comparative Advantage

General Theory:

A country should specialize in products and services in which they have a comparative advantage. They should then trade with another country that has products in which that country has a comparative advantage. In this way both countries become better off.

Absolute Advantage

General Theory:

A country has an absolute advantage economically over another, in a particular good, when it can produce that good more cheaply. A ...

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