This preview shows page 1. Sign up to view the full content.
Unformatted text preview: 3
X2 P1 = (MC) Slope = - P1
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
→ 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...
View Full Document
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).
- Spring '06