ECON 2010 Lecture Notes - Lecture 30: International Trade, Absolute Advantage, Protectionism

• School: CU-Boulder
• Department: Economics
• Course: ECON 2010
• Professor: Alexander Hill

Document Summary

Current account balance difference between import and export. When someone imports a lot, someone else has to export a lot. Protectionism how much a country closes off it"s trade-borders (tariffs/taxes on imported goods) We don"t care about the amount of jobs, but having the right jobs (specialization) Ricardian squre (game theory/prisoner"s dilemma with trade: when a country has an advantage in both squares over. Relatively what you can produce/can have absolute advantage in all, but only comparative advantage in one good: opportunity cost (of production) producing the other good. Produce all of one good, opportunity cost is not. Terms of trade: the amount of import goods an economy can purchase, ratio of export goods to import goods per unit of export goods.