Economics 1021A/B Lecture Notes - Lecture 4: Capital Accumulation, Absolute Advantage, Comparative Advantage

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Nicholas Kahnert

Document Summary

Lecture 4 chapter 2 & 3 the economic problem, Doesn"t overcome scarcity and avoid opportunity cost. The faster we make production grow, the greater is the opportunity cost of economic growth. Comes from technological change and capital accumulation. Development of new goods and new ways of producing goods. Growth of capital resources, including human capital. An economy devotes all its factors of production to producing consumption goods and services. None to advancing technology and accumulating capital. Devote fewer resources to producing current consumption goods and services. Some resources to accumulating capital and developing new technologies. A person can perform the activity at a lower opportunity cost than anyone else. Producing the good where you have a comparative advantage. Market = any arrangement that enables buyers and sellers to get information and to do business with each other. Buyers and sellers meet and an auctioneer or a broker helps to determine the prices o.