AS.180.101 Lecture Notes - Lecture 8: Absolute Advantage, Opportunity Cost, Comparative Advantage
Document Summary
Lecture 3: trade offs, comparative advantage, & production possibilities. Gains from trade in a world confronting scarcity. How do we approach this: think logically, separate signal from noise, think outside the box, stay humble, labor appears to be up 2% Change in work week extremely minimal change in number of working hours per week average. Labor productivity= how much we work x how cleverly we work . 3rd quarter real gdp: employment report a bit weaker than expected. Scarcity: you can"t always get what you want, limited resources, countless wants, prof hamilton says, microeconomics is making the best of a bad situation. They insure we operate along ppf: economists: assume optimal use of inputs. Evaluate tradeoffs along ppf: entrepreneurs: revolutionize use of inputs. Shift the ppf outward can only do this by inventing something, changing the nature of hwo we can actually acquire something. Louisiana catfish | salmon production possibilities change, dramatically: 1000 catfish= 50 salmon, 20 catfish= 1 salmon.
