Econ1-Fall2010-02-CompAdv-handout

Econ1-Fall2010-02-CompAdv-handout - Announcements Economics1

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Economics 1 rinciples of Microeconomics Principles of Microeconomics 2. Comparative Advantage (A) Fall 2010 Herb Newhouse 1 nnouncements Announcements e Study Guide and Connect provide (optional) The Study Guide and Connect provide (optional) questions and answers that you can practice to prepare for the exams. The Study Guide is available at the campus bookstore. You can access Connect here: http://connect.mcgraw hill.com/class/prof_newhouse_fall2010 You’ll need either the code that comes with new versions of the textbook or you’ll need to purchase registration from McGraw Hill. 2 eadings Readings h 2: Comparative dvantage (p 35 9) Ch 2: Comparative Advantage (p 35 49) Exchange and Opportunity Cost omparative Advantage and Production Comparative Advantage and Production Possibilities 3 utline Outline pportunity Cost Opportunity Cost. Production Possibilities Curve. Comparative/Absolute Advantage. Gains from Trade. 4
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pportunity Cost Opportunity Cost Why are you attending university? Learning, More independent, Earning potential, Partying, etc. How much money will it cost (CA resident/On campus)? es: $11 300 Fees: $11,300 Room and board: $11,522 Books: $1,560 ansportation: $1 071 Transportation: $1,071 Personal expenses: $1,505 Health insurance: $870 What else are you giving up? Lost income and other things. 5 pportunity Cost Opportunity Cost The opportunity cost of an action is the value of the next best alternative that must be foregone in order to undertake the activity. When you undertake an action there are many other things you could possibly do. The opportunity cost of that action is the value of the next best alternative. What is the opportunity cost of a year at UCSD? Fees, (potentially) part of room and board, books, lost come income. 6 pportunity Cost Opportunity Cost What is the opportunity cost of purchasing lunch at the Price Center?
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Econ1-Fall2010-02-CompAdv-handout - Announcements Economics1

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