EC120 Lecture Notes - Lecture 4: Luxury Goods, Job Satisfaction, Comparative Advantage

• School: WLU
• Department: Economics
• Course: EC120
• Professor: Ken Jackson

Document Summary

Calculate opportunity cost of production: what else could you make with the same inputs, draw a production possibility frontier for each participant. Lower opportunity costs determine comparative advantage, which drives trade. Countries will specialize (at least partially ) according to comparative advantage. Labour market for young adults ( if they were really good, hurts universities demand) Education market in other countries(uni vs college: expectations how does education affect well-being. Current consumption value(people that want to go uni may go. What affects supply? up or down: input prices wages, technology will tech make education cheaper, expectations education cannot be stored, but employment contracts are long, number of sellers supply is strictly controlled by govt. Organized market: grains or oils ( single stock exchange or group that is connected),regulated. Competitive markets: homogenous (no differentiation, numerous buyers and sellers. Perfect competition is rare, but useful to start. Law of demand correction: as price rises, quantity demanded for a good falls.