Chapter 3 interdependence and the gains from trade 5

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Chapter 3 – Interdependence and the Gains from Trade 5 Increasing Opportunity Costs 3 3 Opportunity costs are increasing because resources are specialized; better suited to production of one of the goods CDs BW
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Chapter 3 – Interdependence and the Gains from Trade 6 Comparative Advantage o A country (person, firm) has a comparative advantage if it can _____________________ o ________________________________ o __________________________ o (Is/is not) relevant to trade
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Chapter 3 – Interdependence and the Gains from Trade 7 Comparative Advantage - Examples 4 Canada’s vast forests give it a comparative advantage in producing pulp and paper products France’s climate and topography, together with the accumulated knowledge of generations of vintners, provide that country with a comparative advantage in producing fine wines Australia’s huge expanses of arable land give it a comparative advantage in producing grain 4 In notes
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Chapter 3 – Interdependence and the Gains from Trade 8 Comparative Advantage Activity 5 France and Germany each produce wine and beer using a single homogeneous input – labour
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