Comparative Advantage and International Trade

Comparative Advantage and International Trade - Economics...

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9/6/11 Economics Opportunity cost: what you’re losing/what you’re gaining Inside the production possibilities frontier Staying within causes it to become more efficient But don’t have to give up anything because were at an inefficient point and were not using all of the resources Comparative advantage and International trade Be American, Buy Vietnamese Shrimp For the first time in recorded history, Americans were eating  more shrimp than canned tuna in 2002 (US Commerce Dept) By 2005, Americans were eating 4.1 pounds of shrimp a year vs.  3.1 pounds of canned tuna. Why? o Shrimp is being shipped here from those farms and  because of better technology to preserve shrimp allows  that to occur o Even though the price of canned tuna is higher than that  of shrimp, shrimp price is lowering o Different countries have different production costs so they  can be more efficient and lower their prices, while canned  tuna has been rising Is it a good thing that we now buy most of our shrimp from 
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Comparative Advantage and International Trade - Economics...

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