ECON 2030 Chapter : Chapter 4
Document Summary
Mutually beneficial trade can occur if production/specialization occurs along the lines of comparative advantage. Just bc someone is more productive than someone else, doesn"t mean you can"t benefit from trade. If we weren"t benefitting we wouldn"t import it. Even if both sides benefit from trade, there will still be opposition: workers that lose their jobs b/c they can trade for the products they were making. If the actual price is above this max, you don"t buy it: quantity demand is zero, for the buyer, price is the cost, seller is the minimum. Income: normal goods one in which a person"s income increases, everything else held constant, their demand for the good increases. Inferior good buy them bc you don"t have the ability to afford anything better: buy them because they are cheaper, tastes are different. What"s inferior to one person, isn"t inferior to another: price of related goods in consumption, this or that.
