ECO 1102 Chapter Notes - Chapter 3: Alan Greenspan, Absolute Advantage, Autarky

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: David Gray

Document Summary

Chapter 3: interdependence and the gains of trade. Punch line: it is usually advantageous for countries, firms, individuals, or other economic units to. Specialize in the production of one or a few g & s, and trade the majority of their product away in exchange for those g & s that they do not produce. Parting words of alan greenspan, former chairman of the fed. Anti-thesis: the robinson crusoe economy of total self-sufficiency, which is called autarky. By specialization and trade, the total amount of production available for consumption is far higher than it is in autarky. Each economic unit should specialize in the production of the good in which they have a. Trade for the good in which they do not have it. As in the textbook, there are two producers, the farmer and the rancher, and two goods, meat and potatoes.