ECON 1 Lecture Notes - Lecture 2: Brad Delson, Absolute Advantage, Corn Laws
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Read warm-up exercises before section: pg 1-3 of course reader. Must me on time to receive credit for participating. Clickers: 1 pt on reading if correct, 3 pts if you tried half in class, 1 pt t/f if correct. David ricardo, principles of political economy and taxes 1817. Responding to corn laws in britain (corn, any grain) Question of whether to put tariffs or not, making it more expensive/impossible to trade with other countries. Each country should specialize in its comparative advantage. Advantage of producing not everything you consume. Each country could then trade its specialties with others. Ability to indirectly trade one"s production for society. Ricardians eat only fish sandwiches, assumptions in our model. Both countries would be better off (cid:396)ricardo"s island(cid:397) a simulation. 1 bread + 1 fish = 1 sandwich. The rich family: (more productive than other fam in both) The poor family: (less productive than other fam in both)
