Graphing - 180 0 60 0 150 20 50 20 120 40 40 40 90 60 30 60...

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Graphing Graphs serve two purposes. 1. To develop economic theories, graphs offer a way to usually express ideas. 2. When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns. Graphs of a single variable Pie chart Bar graph Time-series graph Graphs of Two Variables Two coordinate system US UK wheat cloth wheat cloth
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Unformatted text preview: 180 0 60 0 150 20 50 20 120 40 40 40 90 60 30 60 60 80 20 80 30 100 10 100 0 120 0 120 US has an absolute advantage in wheat UK has no absolute advantage Comparative advantage opportunity cost is lower. Opportunity costs in the US 20 cloth =30 wheat - International trading ratio(terms of trade) 1 cloth =1.5 wheat cloth =1 wheat US has a comparative advantage in producing wheat because the opportunity cost is less in the US. Opportunity in the UK 20 cloth =10 wheat 1 cloth =.5 wheat 2 cloth = 1 wheat UK has a comparative advantage in cloth because the opportunity cost of producing cloth in less than in the US....
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This note was uploaded on 11/11/2011 for the course ECO 2301 taught by Professor Green during the Fall '11 term at Sam Houston State University.

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