ECO101H1 Lecture Notes - Lecture 4: Comparative Advantage
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ECO101H1 Full Course Notes
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8 (+3: jane has absolute advantage in production of cloth and corn, (ie: is more productive < > more output for a given amount of input, yet comparative advantage is key to gains from trade, economic fallacy, high wage countries such as canada cannot compete with low wage countries such as china and mexico. 10 hours: questions, does gates have a comparative advantage, what is the opportunity cost of time, next best alternative, gates earns ,000 per hour as executive, consultant earns per hour, opportunity cost of writing program, gates, consultant: Jobs will be lost (no comparative advantage) and jobs will be gained (comparative advantage: why is free trade so controversial, benefits are widely distributed, costs (example, plant shutdown) tend to be concentrated, focus of public debate is on job gains and losses, not on, lower prices to consumers, higher productivity and standard of living in the long run.
