The modifier “comparative” is used to highlight things that are, in isolation, disadvantages,
That’s just false. If A can make wool for $2 and coffee for $3, and B can make wool for $6 and coffee for $5, then B has a comparative advantage in coffee (which is in isolation a disadvantage) and A has a comparative advantage in wool (which in isolation is an advantage). Being a disadvantage just isn’t necessary for a comparative advantage.
Being a disadvantage just isn’t necessary for a comparative advantage.
The critical piece necessary for trade to be profitable is that each party can produce a good at lower marginal and opportunity cost than the other party. I was thinking of just the absolute advantage case (like the example you gave and the example I gave) where one party’s disadvantage becomes an advantage in the presence of trade, but I believe it’s correct to refer to two parties which each have an absolute advantage as comparative advantage. I’m not sure about that, though.
That’s just false. If A can make wool for $2 and coffee for $3, and B can make wool for $6 and coffee for $5, then B has a comparative advantage in coffee (which is in isolation a disadvantage) and A has a comparative advantage in wool (which in isolation is an advantage). Being a disadvantage just isn’t necessary for a comparative advantage.
The critical piece necessary for trade to be profitable is that each party can produce a good at lower marginal and opportunity cost than the other party. I was thinking of just the absolute advantage case (like the example you gave and the example I gave) where one party’s disadvantage becomes an advantage in the presence of trade, but I believe it’s correct to refer to two parties which each have an absolute advantage as comparative advantage. I’m not sure about that, though.