econ434notes9b

econ434notes9b - 3 dynamic gains a income increases –...

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Econ 159 Wednesday, September 21, 2005 Static Gains from Trade: Polar bear rugs versus Coffee in Alaska versus Brazil: Polar bear rugs easier to get in Alaska, Coffee easier to get in Brazil The prices are different, so the two areas can trade goods. Ricardo: Gains from trade 1. comparative static – does good for those trading, but also some are hurt 2. uniqueness
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Unformatted text preview: 3. dynamic gains a. income increases – savings increases – investment increases – capital stock increases – income goes up b. transfers of technology – the wheel, Tetris c. education 4. economies of scale and scope 5. political gains Iron law of wages: wage rate is inversely proportionate to the number of laborers....
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This note was uploaded on 01/12/2010 for the course ECON 434 taught by Professor Byrns during the Spring '09 term at UNC.

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