David lee aemecon 2300 22 of lecture 3 increasing

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Unformatted text preview: 3 X2 P1 = (MC) Slope = - P1 P2 S C A B A B X1’ X1’’ Prof. David Lee X1 AEM/ECON 2300 X1’ X1’’ X1 24 of Lecture 3 P P P P S1 S S2 + Q1 ’ Prof. David Lee Q1 Q2 ’ Q2 S3 + Q3 ’ AEM/ECON 2300 = QT ’ Q3 25 of QT Lecture 3 How do we determine comparative advantage in the real world? → Evaluate marginal (opportunity) costs of production, and compare to terms of trade – e.g. international (and national) prices Example 1: Practicing law vs. lawn-mowing Example 2: Supply of low-skilled labor dependent on opportunity costs of labor (e.g. McDonalds) Prof. David Lee AEM/ECON 2300 26 of Lecture 3 How do we determine comparative advantage in the real world? Evaluate marginal (opportunity) costs of production, and compare to terms of trade (e.g., international prices) International example (1): Food security in LDC’s – devote scarce resources to food pro...
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This note was uploaded on 11/21/2013 for the course AEM 2300 taught by Professor Lee,d.r. during the Spring '06 term at Cornell University (Engineering School).

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