ECON 355 Lecture Notes - Lecture 1: Max Q, Absolute Advantage, Chd1L
Document Summary
Table 2. 1 canadian import of coffee from top 10 countries. Imports of co ee in 2016. Canada has an absolute advantage in the producvon of autos and no advantage in the producvon of co ee. So why should canada trade with colombia when it can produce both goods bexer than or as well as. Table 2. 2 - comparative advantage and gains from trade. We"ll take the following steps for every trade model that we discuss. We will then introduce a foreign country (f. c. ), which would have exactly the same characterisvcs as the home country except for its technology. We will nally show paxerns of trade and gains from trade for each country. Assume that we are dealing with an economy (which we call home). Labor is the only factor of produc6on. Only two goods are produced. The supply of labor is xed in each country. The produc6vity of labor (techonology) in each good is xed.
