New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Week Four Notes

by: Samantha Pruser

Week Four Notes ECON 222 001

Samantha Pruser
GPA 3.8
Principles of Macroeconomics
Chandini Sankaran

Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Week Four Notes Lecture Seven- Tuesday, September 15 Lecture Eight- Thursday, September 17
Principles of Macroeconomics
Chandini Sankaran
Class Notes
25 ?




Popular in Principles of Macroeconomics

Popular in Economcs

This 6 page Class Notes was uploaded by Samantha Pruser on Monday September 21, 2015. The Class Notes belongs to ECON 222 001 at University of South Carolina taught by Chandini Sankaran in Summer 2015. Since its upload, it has received 57 views. For similar materials see Principles of Macroeconomics in Economcs at University of South Carolina.

Similar to ECON 222 001 at USC

Popular in Economcs


Reviews for Week Four 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: 09/21/15
Macroeconomics Lecture Seven Notes Review Roses dozen 200 80 Orchids dozen Tuesday September 15 2015 Opportunity Cost of 200 dozen roses 80 dozen orchids Opportunity cost of 1 dozen roses 04 dozen orchids Comparative Advantage Lowest opportunity cost of producing a good Girl 1 apple 1 hour 1 cherry 8 hours Boy 1 apple 20 hours 1 cherry 10 hours 40 work hours available for both Girl Apples A 40 A Production Point with Trade 30 C Consumption Point and Production Point without Trade D Consumption Point with Trade 20 quotquotquotquotquotquotquot quot B O 25 3 Cherries Girl Without Trade With Trade Production Point 20 apples and 25 cherries 40 apples and 0 cherries Consumption Point 20 apples and 25 cherries 3O apples and 3 cherries Boy apples 10 A Production Point with Trade C Consumption Point and Production Point without Trade C D Consumption Point with Trade 1 1 3 B O 1 2 4 cherries Boy Without Trade With Trade Production Point 1 apple and 2 cherries 0 apples and 4 cherries Consumption Point 1 apple and 2 cherries 10 apples and 1 cherry Girl has absolute advantage in both apples and cherries Girl 8 hours 1 cherry 1 hour 1 apple Equalize hours Boy 10 hours 1 cherry 20 hours 1 apple 1 cherry 8 hours 1 apple 1 apple Find Opportunity Costs 1 cherry 8 apples 1 apple 18 cherry Gains from Specialization and Trade Continued next page 1 cherry 10 hours 1 apple 20 hours 1 cherry 12 apple 1 apple 2 cherries United States Shirts Absolute Advantage Consumption Point without Trade 3 O 3 4 Boots Canada Shirts 6 Consumption Point without Trade 3 Absolute Advantage O 3 5 Boots US has absolute advantage in shirts Canada has absolute advantage in boots Only want to do comparative advantage calculations if one producer is better at producing both goods Comparative United States Canada 4 boots 12 shirts 6 shirts 6 boots 1 boot 3 shirts 1 boot 1 shirt 1 shirt 13 boot 1 shirt 1 boot Comp Advantage in Shirts Comparative Advantage in Boots United States Production Point 12 Shirts and 0 with Trade Boots Consumption 6 Shirts and 3 Point with Trade Boots Gains from Trade 3 Shirts Canada Production Point 0 Shirts and 6 with Trade Boots Consumption 6 Shirts and 3 Point with Trade Boots Gains from Trade 3 Shirts Summary of Gains from Trade Step One If a graph is provided look at the axis If a table is provided carefully read the table Item Labor hours needed to produce 1 unit Beer 5 hours 6 hours Sausage 8 hours 12 hours US 5 hours 1 Beer Germany 6 hours 1 Beer 8 hours 1 Sausage 12 hours 1 Sausage Pounds Production Item Pounds Production per hour Beer 5 Beers 6 Beers Sausage 8 Sausages 12 Sausages Step Two Absolute Advantage Who produces more in the same amount of time Whoever takes less time to produce the same amount of the good Step Three Comparative Advantage If one producer has an absolute advantage in both goods calculate opportunity cost The lower opportunity cost producer of a good has comparative advantage in that good If one producer has an absolute advantage in one good the other producer has an absolute advantage in the other good 0 Then that is what they will have their comparative advantage in Step Four Compare consumption point before and after trade to calculate the gains from trade Legacy of Adam Smith and David Ricardo 0 Adam Smith wrote quotWealth of Nations 1776 0 David Ricardo wrote quotPrinciples of Political Economy and Taxation 1817 Benefits of Free trade generally agreed upon by economists Thursday September 17 2015 Macroeconomics Lecture Eight Notes Professor Chandini out sick TA runs class by polling on iclickers Carlos 1 quilt 90 hours Hilda 3 quilts 90 hours 2 dresses 90 hours 9 dresses 90 hours Carlos has a comparative advantage in quilts absolute advantage in neither Carlos 1 quilt 2 dresses Hilda 1 quilt 3 dresses 1 dress 12 quilt 1 dress 13 quilt Always specialize in the product you have the comparative advantage in Ceteris paribus means all else equal Demand for normal goods increases as income increases Increase in price of complement good makes demand for normal goods go down Law of Supply an increase in price causes an increase in the quantity supplied and a decrease in price causes a decrease in the quantity supplied


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


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'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Anthony Lee UC Santa Barbara

"I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.