Chapter 18 International Economics

Chapter 18 International Economics - International...

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International Economics Chapter 18 Say’s Law of Markets Gaining from International Trade The Law of Comparative
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How do we pay for imports? Say’s Law of Markets: We pay for the output of other persons which reach us from other parts of the world with our own production. Why do other nations want to export their goods to Switzerlan d Canad a Japa n U S
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Source of gains, again (see Chap. 2) The Law of Comparative Advantage Output per worker day Nation uggs pods Spara 2 1 Tara 3 9 Opportunity Costs (in terms of the other product) Spara ½ 2 (=2s per 1h) Tara 3 (=9p/3u) 1/3
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Production Possibilities of Spara and Tara before specialization and trade. (note constant cost) Consider Spara has 200 workers ; Tara has only 50 workers . pods uggs uggs 200 450 400 150 Production possibility for Spara Production possibility for Tara
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Production Possibilities of Spara and Tara after specialization and trade.
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This note was uploaded on 04/01/2012 for the course ECON 101 taught by Professor Balaban during the Fall '07 term at UNC.

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Chapter 18 International Economics - International...

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