Poli 243 notes Feb 5

Poli 243 notes Feb 5 - Feb 5 2009 Poli 243 IPE The Politics...

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Feb 5, 2009 Poli 243 – IPE The Politics of Trade: From IR to IPE The Logic Behind Trade - Comparative advantage: o Definition: “an actor’s ability to produce a good or service more efficiently than another actor’s ability to do so” - The consequence: specialization o Important for thinking about how societies function individually and internationally Comparative Advantage (Ricardo) - Country A can (in isolation) produce a max of either o Industrial output (textiles): 300 units o Agricultural output (wine): 150 units If a country puts all of their resources into either of these things, this is how much they can produce o The price of goods prior to trade: 300/150 or 2/1 (2 units textiles = 1 unit wine) - Country B can (in isolation) produce a max of either o Industrial output 80 units o Agricultural output 240 units o Price of goods prior to trade: 80/240 (1 unit textile = 3 units wine) - Supply and demand: things that are less abundant are more expensive, things that are readily available are cheaper
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This note was uploaded on 04/28/2011 for the course POLI 243 taught by Professor Markbrawley during the Spring '09 term at McGill.

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Poli 243 notes Feb 5 - Feb 5 2009 Poli 243 IPE The Politics...

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