ECON 1101 Lecture Notes - Lecture 2: Comparative Advantage, Unemployment
7 Mar 2017
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The quantity of a good or a service that producers are willing and able to sell at a given set of prices over a given period of time. Upward sloping graph; as price goes up, so does quantity (positive relationship) Demand and supply and just if then statements. They don"t tell us what specific price/ quantity actually occurs. To see what the price and quantity really are, we combine supply and demand both. A system in equilibrium is stable, balanced, in harmony. Everyone is happy (doesn"t count the people who are not willing and able to purchase the good) Opportunity cost: every choice you make means you are giving up the chance to do something else; there is no such thing as a free lunch. Extreme case in which countries do not trade: if the slopes were the same because then there is no comparative advantage. To be in the labor force, you must be.
