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For more information, please see full course syllabus of AP Macroeconomics
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Lecture Comments (8)

1 answer

Last reply by: Professor Jibin Park
Fri Apr 8, 2016 10:21 PM

Post by Acme Wang on April 3 at 07:21:13 AM

Hi Professor,

I am just a little bit confused about the example of Korea and Russia that you gave in discussing Absolute Advantage. I think DVD and sweatshirts could not come out the point that Korea has absolute advantage in toy production(since DVDs and sweatshirts are not related to toys right?). I may be think too much haha.

Sincerely,

Acme

1 answer

Last reply by: Professor Jibin Park
Sun Aug 23, 2015 11:59 PM

Post by Jim Tang on August 23, 2015

last example required some thinking bc it involved workers instead of production -- is this usually the case on the exam, or do both appear? instead of how much you produce, it was which one was more efficient according to the # of workers.

1 answer

Last reply by: Professor Jibin Park
Thu Jan 1, 2015 5:44 PM

Post by Marcelo Quijano on January 1, 2015

Are there ever situations where one country has a comparative advantage in making both items?
Or can one county have a comparative advantage in one but be the same in the other item?

1 answer

Last reply by: Professor Jibin Park
Wed May 14, 2014 12:50 AM

Post by Angela Patrick on May 13, 2014

Will a comparative advantage shown on the PPF curve always be linear?
Also, are there any times when our graphs either need to be curved or linear?

Comparative Advantage & Trade

  • Trade and specialization in market economies creates wealth for all countries involved.
  • Comparative advantage takes into account the opportunity cost of a decision.
  • Absolute advantage simply states who is better at making a product and is therefore not as helpful as comparative advantage because opportunity cost is not taken into account.
  • In order to find a country’s comparative advantage, create a table and identify the country with the lower opportunity cost.
  • A country with the flatter PPF curve will have comparative advantage for the item on the x-axis.
  • A country with the steeper PPF curve will have comparative advantage for the item on the y-axis.

Comparative Advantage & Trade

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:07
  • Different Types of Economies 1:30
    • Market Economy
    • Command Economy
    • Mixed Economies
  • Absolute Advantage 4:38
    • Better In Producing a Particular Product
    • Example
  • Comparative Advantage 8:09
    • Lower Opportunity Cost in Producing a Particular Product
    • Example
  • Comparative Advantage and PPF Graph 14:30
  • Example 1 21:33
  • Example 2 25:57
  • Example 3 28:59
  • Example 4 30:17
  • Example 5 35:21
  • Example 6 40:37