IAFS 1000 Lecture Notes - Lecture 6: Opportunity Cost, Human Capital, Big Country
9 Aug 2016
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Basic concepts de nition = exchanges of goods/services across national borders only 10% of goods and services we produce cross a national border, most of what we produce is sold to consumers within usa. Usa, and have been so for a very long time. = refers to situation where you do not permit any international exchange, gov keeps borders completely closed, dont import foreign goods and don"t let domestic producers sell abroad most autarkic national gov: north korea. Us imposed tari s on steel in 2000 (cid:12254) saved 7,300 jobs in us (cid:12254) also raised price of steel (cid:12254) which cost steel consumers billion thus saving these jobs is really expensive. Usa and ghana, food and movies (cid:12254) (cid:12254) (cid:12254) see graph in slides* Usa has advantage in both producing food and movies comparative advantage: looking at opportunity costs of each country to produce each. Us sacri ces 25 movie units per 100 more food units.
