Textbook Notes (368,316)
United States (206,002)
Economics (15)
ECN 211 (11)
Chapter 3

ECN 211 Chapter 3: Reading Notes: Chapter 3 - Interdependence and the Gains from Trade (2) (1)

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ECN 211
Stefan Ruediger

Mankiw video: Why Trading with Others Makes Good Sense • Using resources made by other people ◦ Food, clothes, homes • Even if you were the best sewer, farmer, and builder, you wouldn't keep all of those resources to yourself ◦ You share and trade and make money off of it • David Ricardo ◦ Trade amongst nations and amongst individuals • President of the U.S. ◦ Worlds fastest typer ‣ Should he type all of his own documents along with his other presidential duties? Or should he hire a typist/ secretary to do it for him? • Hire a secretary Chapter 3 - Interdependence and the Gains from Trade • Interdependence is possibly because people trade with one another • People provide goods and services to consumers because they get something in return A Parable for the Modern Economy • Ex. Rose produces meat, Frank produces potatoes ◦ Trade allows for greater variety • Ex. If rose is good at producing meat and potatoes, should she still trade? • Production possibilities ◦ The rate at which society could trade one good for the other depended on the amounts that were being produced ◦ PPF's are useful in showing t
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