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For more information, please see full course syllabus of AP Microeconomics
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Lecture Comments (17)

1 answer

Last reply by: Professor Jibin Park
Tue Nov 10, 2015 12:07 PM

Post by Taichi Ishikawa on November 10, 2015

For example 6 in the video, I understood why USA has comparative advantage in making computers but I still don't get why India has comparative advantage in making cars aside from the fact that there can't be two comparative advantages.
Thank you

3 answers

Last reply by: Professor Jibin Park
Thu Sep 3, 2015 12:49 AM

Post by Shirley Yang on March 21, 2015

Could you please explain why the first statement in example six is false? I am kind of confused about absolute advantage of India and China. Thank you very much.

1 answer

Last reply by: Professor Jibin Park
Thu Feb 26, 2015 11:52 AM

Post by SeungJoo Han on February 23, 2015

In last example, I've got that India has comparative advantage in Computer, not Usa. I made a chart what you have been making in order to get the answer. I just want you to check that problem for me. Thank you

4 answers

Last reply by: Rebecca Dai
Sun Oct 19, 2014 6:22 PM

Post by Rebecca Dai on October 16, 2014

Another question. Is it right that if both country have the same ability of making good A and different ability of making good B, the country that is better at making good B has both absolute advantage and comparative advantage in good B? Thanks

1 answer

Last reply by: Professor Jibin Park
Thu Oct 16, 2014 9:51 PM

Post by Rebecca Dai on October 16, 2014

And also, do I need to take any notes while having the classes? PS: I will take the exam half a year after finishing studying.

1 answer

Last reply by: Professor Jibin Park
Thu Oct 16, 2014 9:50 PM

Post by Rebecca Dai on October 16, 2014

-Is the book "5 steps to 5 in AP....."the only text book that I need for this class?
-What should I do by myself to help study? Like using textbook. But you may need to tell me how to use the textbook or how to study on my own.
-I know nothing about economy when I started on educator.com one day ago. Is it enough to get 5 if I just follow your lectures and do some after class work?
-Is it OK if I finish studying both micro and macro by Christmas and attend the exam in may? Cause it is a long time away after finishing studying. Thank you! Hope you can answer my questions!

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
  • I. Basic Economic Concepts 0:45
  • Trade and Specialization 1:36
  • I, Pencil 3:29
    • Market Economy
    • Command Economy
    • Mixed Economy
  • Absolute Advantage 6:29
    • Better at Producing a Particular Product
    • Example
  • Comparative Advantage 9:09
    • Lower Opportunity Cost in Producing a Particular Product
    • Example
  • Comparative Advantage & PPF Graph 16:08
  • Example 1 20:41
  • Example 2 24:29
  • Example 3 29:13
  • Example 4 32:52
  • Example 5 37:46
  • Example 6 43:39