1/26 - Principles of Microeconomics Lecture Notes
1/26 - Principles of Microeconomics Lecture Notes ECON:1100:0AAA
Popular in Principles of Microeconomics
Popular in Economcs
This 2 page One Day of Notes was uploaded by Kelsy Lartius on Tuesday February 3, 2015. The One Day of Notes belongs to ECON:1100:0AAA at University of Iowa taught by Stacey Brook in Spring2015. Since its upload, it has received 116 views. For similar materials see Principles of Microeconomics in Economcs at University of Iowa.
Reviews for 1/26 - Principles of Microeconomics Lecture Notes
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 02/03/15
Principles of Microeconomics Lecture Notes 126 Lecture Notes Absolute advantage trade can be beneficial if it is voluntary Farmer39s PPF constant opportunity costs Suppose 8 oz meat r 0 oz meat 0 oz potatoes 32 oz potatoes What is the farmer39s opportunity cost 1 oz meat 4 oz potatoes 1 oz potatoes 2 14 oz meat yabx 8 m814p 32IO Rancher39s PPF constant opportunity costs Suppose 24 oz of meat 0 oz of meat 0 oz of potatoes or 8 oz of potatoes m What is the rancher39s opportunity cost 1 oz meat 2 13 oz potatoes 24 1 oz potatoes 2 3 oz meat y a bx m 24 3p 8 9 Absolute Advantage where one producer farmer is more productive in producing a good potatoes and another producer rancher is more productive in producing the other good meat conclude farmer has an absolute advantage in potatoes Le 32 02 vs 8 oz rancher has an absolute advantage in meat Le 24 02 vs 8 oz Suppose without trade production consumption 39 under specialization farmer production absolute advantaqe meat 4 0 potatoes 16 32 under specialization rancher production absolute advantaqe meat 12 24 potatoes 4 0 total production production gains meat 16 24 8 Suppose they agree to trade and the terms of trade are1ozm1ozp trade 10 oz m 10 oz p specialization I speCIallzatlon Wlth and trade m w W Rig original meat 0 10 22 6 consumption potatoes 32 3910 above subtracted rancher from consumption rm 24 10 14 2 after trade potatoes 0 10 10 6 consumption 8 meat 12 potatoes
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'