ATS1326 Lecture Notes - Lecture 3: Opportunity Cost, World Bank, Comparative Advantage
11 Oct 2018
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Manufacturing: the production of tangible goods or products, products you can see, visi(cid:271)le(cid:859)s. Services: provision of intangible things, invisible things, e. g. banking, marketing, retail, restaurants, education, the largest part of the economy in the western world. Productivity: the cost of an output, relative to the input, biggest input = labour costs. If you can reduce input you can increase profits. In the western world we rarely make things, but most commonly design them. Comparative advantage: one should do what one does well, what one does best (given the resources and materials most easily available, what o(cid:374)e does(cid:374)(cid:859)t do (cid:449)ell, should(cid:374)(cid:859)t (cid:271)e do(cid:374)e. If everyone specialises, everyone gets and advantage = productivity increases: being good at what you do, and having low costs to produce it. In wasting an opportunity, comes with a cost: decreases productivity. International consequences and chains of consequence stemming from inequality.
