Notes_for_the_last_day_of_class__Wed_Nov_23_2005_

Notes_for_the_last_day_of_class__Wed_Nov_23_2005_ - Trade...

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Trade 29/11/2005 19:31:00 Comparative Advantage : you are able to produce something at a lower  opportunity cost than someone else Advantages     Cheaper prices More variety More goods Wider markets for producers Gains from Trade                                        A Importing Country     Pre-trade consumer surplus:  A                  B        C    D Pre trade producer surplus: B+E               E Total Surplus: A+B+E Post-Trade consumer surplus: A+B+C+D Post-Trade producer surplus: E Total Surplus: A+B+C+D+E Exporting Country     Pre trade consumer surplus: A+B Pre trade producer surplus: D                           A Total Surplus: A+B+D                                      B             
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Notes_for_the_last_day_of_class__Wed_Nov_23_2005_ - Trade...

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