【正文】
2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Applications of Comparative Advantage ? Principle of parative advantage –Each good – produced by the country with the smaller opportunity cost of producing that good ? Specialization and trade –All countries have more food and more cars 16 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Comparative Advantage ? Trade can benefit everyone in society –Allows people to specialize ? The price of trade –Must lie between the two opportunity costs ? Principle of parative advantage explains: –Interdependence –Gains from trade 14 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Comparative Advantage ? One person –Can have absolute advantage in both goods –Cannot have parative advantage in both goods ? For different opportunity costs –One person parative advantage in one good –The other person parative advantage in the other good 12 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Table 1 10 169。s production with trade 5 17 A* Farmer39。 2022 Cengage Learning. All Rights