ECON 101 Lecture Notes - Lecture 22: List Of Auto Parts, Autarky, Opportunity Cost
Document Summary
Exports: goods and services sold to other countries. Globalization: the phenomenon of growing economic linkages among countries. Percent gdp = how much percent of national income is focused on international trades (imports/exports) Some countries find international trade more important than others. The potential production of other goods a country must forgo to produce an auto part is the opportunity cost of that part. Note: a country has a comparative advantage in producing a good or service if the opportunity cost of producing the good or service is lower for that country than for other countries. Ricardian model of international trade: analyzes international trade under the assumption that opportunity costs are constant; production possibility frontiers straight lines. Autarky: a situation in which a country does not trade with other countries. A country can do better by engaging in international trade: exporting goods that they have a comparative advantage in making and importing goods that they don"t.
