ECON 223 Lecture Notes - Lecture 1: Perfect Competition, Pennsylvania Route 60, Arbitrage
22 Mar 2017
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Econ223: lecture 1- labor productivity and comparative advantage: the ricardian model: the simplest and most important trade model, answers: why nations trade, the silk road. International trade network among asian, part of europe, and africa. Babylonia-china trade: cobalt for colouring glasses, the sexagesimal system, babylonia and china (shang dynasty) Country a is more efficient at producing roses requires much less labour input. Country b is more efficient at producing computers requires much less labour input. 2017-01-10: can trade be mutual benefit between two countries one of which is more productive in every possible area than the other, opportunity cost. If scarce factors of production are used to produce two goods, producing more of one good always requires producing less of other other good. Important concepts: absolute advantage, comparative advantage, pattern of trade, who trades with who, what are they trading, what is the direction of trade, gains from trade.
