Comparative advantage, law of increasing opportunity cost

2 Pages
Unlock Document

Colorado State University
Agriculture + Resrce Econ
AREC 202
Christopher Goemans

31 August On a graph of income verses age, the y intercept is your income when you’re 0. The slope of a line at its maximum is 0. You have the comparative advantage over Bill Gates. You don’t have anything to lose by mowing lawns rather than making computer programs Bill Gates should only be making computer programs, you should only be mowing lawns. 2 people 2 goods → animals hunted / cheese Deserted island You have the comparative advantage against the other guy in animals killed. The other guy has the comparative advantage against you in cheese making. Deal: You spend 100% of your time on animals, he spends 100% of his time on cheese Trade 50 / 50 Questions for thought i.e. poss test ?s 1. What if the other guy had the absolute advantage in both goods? Trade still beneficial? 2. Could either individual have the comparative
More Less

Related notes for AREC 202

Log In


Don't have an account?

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.