ECON 1BB3 Lecture Notes - Lecture 2: France 2, Comparative Advantage, Opportunity Cost

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Econ 1bb3: macroeconomics lecture 2: interdependence and the gains from trade and measuring a nation"s income. How to distinguish between final and intermediate goods. Please note the following for chapter 5 reading: Course content: read about the fisher volume index in the notes for chapter 5: Page 102 - fyi other measures of income - Pages 106-108 - omit reading on real gdp versus nominal gdp. Gives us the opportunity cost of producing one more unit of the good on the x-axis (good x) Calculate the slope of the ppf below (slope = -2) thus to produce one more good. X, we must give up 2 good y. Graph the production possibilities schedule and comment on its shape. The shape of this product possibilities schedule is a negative slope. To produce one more bw, we must give up 2 cd"s. Thus the o. c is 2 cd"s to make 1 bw. Production possibilities schedule for bottles of water and cds.