ECON 211 Lecture Notes - Lecture 12: Durable Good, Opportunity Cost, Comparative Advantage
Document Summary
Imports exceed exports: borrow from foreigners, sell real assets to foreigners, trade surplus, exports exceed imports, lend to foreigners. Key trade facts: principal u. s. exports include, chemicals, ag products, consumer durables, semiconductors, aircraft, us provides about 8. 5% of world"s exports, principal us imports include, petroleum, automobiles, metals, household appliances, computers. Info on import and export data at cia factbook: current account balance: the amount of business we do with other countries (very broad definition) Many of nebraska"s trading partners mirror those of the us. Cost of producing everything yourself: cost to get started/change industry, not as efficient, opportunity cost of producing something that is more efficient, time to get crop established, climate control. Economic basis for trade: nations have different resource endowments, capital-intensive goods. Comparative advantage: the ability to produce an item more efficiently than another item or country. Absolute advantage: having the ability to produce all things better than another country.
