ECONOM 1014 Chapter Notes - Chapter 2: Kenneth Tobey, Ebay, Comparative Advantage
Document Summary
If we each had to produce our own food, clothing, and shelter, the result would be: mass starvation and the collapse of civilization. In the real world, as a result of trade, workers in sectors with increased demand: will see their wages rise. Most of us can earn in one day of nonfarm work enough money to purchase more food than we could possibly grow ourselves in a year. One important reason for this is that farmers: can learn more about farming than nonfarmers can because they spend more time doing it. When two nations with different comparative advantages trade: they both benefit. Workers in sector b, which has experienced falling wages due to changing comparative advantage, will move to sectors: with rising wages. If kyle voluntarily sells a used guitar to tona for , it must be that: tona values the guitar more than kyle does.
