Econ 1

Econ 1 - ECON 1 Lecture Notes Chapter 2 – Why do people...

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Unformatted text preview: ECON 1 Lecture Notes 09/29/10 Chapter 2 – Why do people trade? Question- How can we satisfy our wants and needs in a global economy? o We can be economically self-sufficient o We can specialize and trade with others, leading to economic interdependence- Individuals and nations [not done] Interdependence and the Gains from Trade- why is interdependence the norm?- what determines pattern of production / trade? Case: lost on desert island- what do you want/need? o Water o Shelter o Food o Communication means o Entertainment- What resources do you have? o Trees fruit, vegetables o Creativity, labor o Natural resources Production Possibilities Curve- The PPC: boundary b/w combo of goods/services that can and cannot be produced- Need to know: o Total amt of resources avail for production o Production method/technology (how good you are at doing it)- labor: 8 hrs/day- production technology: Pounds obtained in 1 hr Pounds obtained in 1 hr Individual Coconuts Fish Greg 4 1 Shub 6 3 From PPC we can tell:...
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This note was uploaded on 08/30/2011 for the course ECON 1 taught by Professor Tang during the Fall '08 term at UCSD.

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Econ 1 - ECON 1 Lecture Notes Chapter 2 – Why do people...

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