ECON 1000 Lecture Notes - Lecture 5: Absolute Advantage
8 May 2017
School
Department
Course
Professor
Document Summary
Econ 1000 week 3 lecture 5. To help solve problems and understand how individual economic relations operate, economists use graphs, examples and charts. When you have a lower opportunity cost than a competitor for the same product than you have a comparative advantage. When you have the lower resource cost you have an absolute advantage. When you have no comparative advantages trading is useless. Assumptions help identify specific solutions when using examples as well as when trying to describe an economic relation. Assumptions also simplify problems and math in order to find relations and the cause and effect of those relations. Prices can also affect trade and production as well as exporting. When you can"t compete with imports, your unemployment increases. When exchange rates drop it allows trading and profits to increase. Bank of canada can change and fix exchange rates by the rate at which they print money.
