Ch 3 Trade Gain

Ch 3 Trade Gain - Chapter 3: Interdependence and the Gains...

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Chapter 3: Interdependence and the Gains from Trade Everyday rely on many people from around the world One of the Ten Principles: Trade can make everyone better off Individuals and nations rely on specialized production and exchange as a way to address problems caused by scarcity Interdependence is possible because people trade with one another People provide you and other consumers with the goods and services they produce because they get something in return A parable for the Modern Community Production Possibilities Bowed out, it shows rate at which society could trade one good for the other depended on the amounts that were being produced When linear it is possible to switch between two goods at a constant rate If two producers chose to be self-sufficient rather than trade, the two will consume exactly what they produce Comparative Advantage: The Driving Force of Specialization Absolute Advantage Absolute Advantage: the ability to produce a good using fewer inputs than another producer
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This note was uploaded on 01/08/2012 for the course EC 101 taught by Professor Idson during the Fall '08 term at BU.

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Ch 3 Trade Gain - Chapter 3: Interdependence and the Gains...

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