8-31-10

8-31-10 - +2SD / -3BM Consume 4SD/3BM 2SD /7 BM New Example...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Day 3 Lecture Tuesday, August 31, 2010 11:05 AM Ceteris Paribus: "All else equal" Ava: 6 shots BM: 1 Shot + TJ; SD: 1 shot + OJ Ava Julia: 10 shots BM: 1 Shot + TJ; SD: 2 shots + OJ BM Julia BM 10 10
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Expanded with trade 6 Arrow Line: PPF expanded with trade 6 10 SD 5 SD BM:SD SD:BM BM: 1/2 SD SD: 2BM Comparative Advantage: Trade whatever good has the lowest opportunity cost Ideal trade: Julia trades 1.5 BM for one SD SD: 1.5BM 2SD: 3BM Ava Julia Produce 6SD 10BM Trade -2SD/ +3BM
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: +2SD / -3BM Consume 4SD/3BM 2SD /7 BM New Example Ava 6 Shots BM: 1 shot + Tj SD: 1 shot + OJ BM: SD* SD: BM Julia 10 shots BM: 1 shot + TJ SD: 1/2 shot + OJ BM: 2SD SD: 1/2BM* *Produced and Exported good Terms of trade BM: 1.5 SD 4BM: 6SD Ava Julia Prod. 6BM 20 SD Trade-4BM + 6SD-6SD + 4BM Cons. 6SD/ 2 BM 4BM + 14SD Both benefit from trade Both consume more than they would be able to produce by themselves...
View Full Document

This note was uploaded on 03/05/2012 for the course ECON 101 taught by Professor Balaban during the Fall '07 term at UNC.

Page1 / 3

8-31-10 - +2SD / -3BM Consume 4SD/3BM 2SD /7 BM New Example...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online