ECON 260 Lecture Notes - Lecture 1: Absolute Advantage, Comparative Advantage, Opportunity Cost
13 Jun 2017
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Exam regulations: there will be no washroom breaks. Please use washroom before the exam starts: on the desk: Calculator (non-graphing, non-programmable: everything else (phones, watches, pencil cases, etc. ) should be in bags and put bags at the front of the room. Explain the following basic concepts scarcity, trade-off, opportunity cost, and marginal analysis. Explain why economists use assumptions when building models. Explain why economists disagree: gains from trade (ch. Explain the relationship between absolute advantage, comparative advantage, opportunity cost, productivity, and gains from trade. Calculate the opportunity cost and relate the opportunity cost to the slope of ppf. Use ppf model to explain the gains from trade. Apply the principle of comparative advantage to real situations like international trade and division of labour: supply and demand (ch. Explain the law of demand and the law of supply. Differentiate the change in demand and the change in quantity demanded, the change in supply and the change in quantity supplied.
