LECTURE5(2005.927) ★★ CLASS TODAY* ★ ★ ★ ★ P23-42 ★ ☆ Chapter 2: Comparative Advantage: The Basis for Exchange Slide 1
MB MC Chapter 2: Comparative Advantage: The Basis for Exchange Slide 1 LECTURE 5 (2005.9.27) ◼ CLASS TODAY P23-42
Comparative Advantage: The Basis for Exchange MB MC CHAPTER 2
MB MC Comparative Advantage: The Basis for Exchange
Overview This chapter introduces comparative advantage and shows that having people specialize in the production in which they are relatively more efficient allows the production of more of everything. It introduces the production possibilities curve and develops the production possibilities model to show precisely how specialization enhances the productive capacity of an economy Chapter 2: Comparative Advantage: The Basis for Exchange Slide 3
MB MC Chapter 2: Comparative Advantage: The Basis for Exchange Slide 3 Overview This chapter introduces comparative advantage and shows that having people specialize in the production in which they are relatively more efficient allows the production of more of everything. It introduces the production possibilities curve and develops the production possibilities model to show precisely how specialization enhances the productive capacity of an economy
Comparative Advantage: The Basis for Exchange a What do you think? ● Do the Nepalese perform their own services because they are poor or are they poor because they perform their own services? Chapter 2: Comparative Advantage: The Basis for Exchange Slide 4
MB MC Chapter 2: Comparative Advantage: The Basis for Exchange Slide 4 Comparative Advantage: The Basis for Exchange ◼ What do you think? ⚫ Do the Nepalese perform their own services because they are poor or are they poor because they perform their own services?
Exchange and Opportunity Cost Should johnnie cochran write his own wi? o Cochran earns more than $1,000 per hour The cost of having a will prepared is less than $800 Chapter 2: Comparative Advantage: The Basis for Exchange Slide 5
MB MC Chapter 2: Comparative Advantage: The Basis for Exchange Slide 5 Exchange and Opportunity Cost ◼ Should Johnnie Cochran write his own will? ⚫ Cochran earns more than $1,000 per hour ⚫ The cost of having a will prepared is less than $800