Class Notes (835,342)
Canada (509,116)
Economics (1,617)
ECON 1BB3 (535)

1BB3 Notes 5.docx

3 Pages
Unlock Document

Bridget O' Shaughnessy

Lecture # 5 Macroeconomics 1BB3 Date: 17/09/2012 Should you and your roommate divide household chores evenly? Example 1: • There are two interior decorators that can paint and wallpaper. They have 40 hour work weeks. Martha can paint 20 rooms or wallpaper 5 rooms; Stewart can paint 10 rooms or wallpaper 8 rooms. (Constant Opportunity Cost) # Done in 40 Hours Paint Wallpaper Martha 20 5 Stewart 10 8 # Hours Needed to do 1 Room Paint Wallpaper Martha 2 8 Stewart 4 5 Opportunity Cost: • Whatever must be given up to obtain some other items; like going to university instead of working full time. # Opportunity Cost of 1 Room Paint Wallpaper Martha ¼ Wallpaper Room 4 Painted Room Stewart 4/5 Wallpaper Room 5/4 Paint Room • It is useful to put the information into a sentence. AbsoluteAdvantage: • The ability to produce goods with a smaller quantity of inputs. ComparativeAdvantage: • The ability to produce a good with smaller opportunity cost. The comparative advantage tells us what each party should produce in order to maximize efficiency. • NEVER does one party have comparative advantage for in both goods. • Comparative adv
More Less

Related notes for ECON 1BB3

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.