BADM 1004 Lecture Notes - Lecture 9: Opportunity Cost, Comparative Advantage, Capital Intensity

• School: GWU
• Department: Business Administration
• Course: BADM 1004
• Professor: Rehman Scheherezade

Document Summary

1st stage: countries are poor and people think that they are poor. 2nd stage: countries are getting rich quickly but people still think that they are poor ex: brazil, china & india. 3rd stage: countries are rich and the people know that they are wealthy, economic decadence sense of shifting priorities from working to savoring the fruits of life. 4th stage: countries become poorer and people still think of themselves as rich they begin to get in debt and start to leverage. 5th stage: go through deleverage and relative decline, which people are slow to accept. Models and theories of international trade and comparative advantage: prior to adam smith = mercantilism, 1500-1700. Mercantilism: the more i have the richer i am: the measure of national wealth precious metals (gold) export = a way of earning more gold. Moved the world away from thinking of trade as a win/lose.