,
, comp
perfectly
Revision B
①
⑤ CHAPTER O2 e
&
I am going to
takesa
Labourisc ar
wineboth Homen
do so well
Breathe, prod a
ion
understand ~
-
& genous 2 goods 2 countries
& & e
,
*
output home
Absolute adv :
# free entry e exit ③
producing & of goods, a
perfectitur no
transportation
messumptions
same resources
compositive adv: - cost
I goods
Producing ④
more efficiently ,
Lower cost
-
I factor off=
our
How to calce only
Example : Absolute Absolute odL >
- Labour is fully employed : all work in
Home oteaend
H f = wine) cloth
- Noone remains idle
c23
z
2 - is each
wI
supply of 1
.
*
country is
fixed
Foreign
I
has an
absolute can
in both >
-
keep on ↑ Labour,
goods
372 units of Holte output a by same
amount
271 bushels of wheat -
O
Example: comp Home counter
F ppf linear
↓
doct
mode
/3/5 MPL
xE50o
t
mouxoconta
slope
is
↑ Home's oppoost =
3 = 15
.
# Foreign's opplost 06
-
=
= .
: 80 I what
* foreign has a comp ↓ MPL coXh
-
advantage in wheat slope of good on Y How much cloth
Xax is should be given
Wheat: Labour will be hired to point : =
to obtain
up
cloth PC wheat
&
: MPLc X
- -
wheat =
MPL wX Pr solving for
wages
in terms
FOREIGN ERM L TRADE * payments
good
AUTARKY E
Ca
MPLL
: highest point Home : MPL =
4
- of utility , no w
B MPLL trade 22
=wx
realw
100
·
U2
-
↓
4
:
* opp cost of w
RPOt
=
813
( - wheat Pot
R
① consumer 20 Yare
X cott
MC
indiff bito <U under x( =
100 w
A2B
cannot
po
⑨
f: mc
bushelw PW =
1x
3/2
, Home export
supply curve
& free trade
3
Home Consumploi
Home export
Pat
and productions
woth
supply were
N N
Gobusines
50
40
⑧ ②
-j- !d &
of wheat
in
=
25 ul
I
i B It
4050 100 powreat 7 Exports
of
wheat
① A - considering the no trade ea;
with price at 12 ,
the exports are o
,
NOTE because no international trade
↓
A in panel (a)
Pw =
oppcotine corresponds
T
eg
= 2
e to A in panel (b)
To Obtain 2
of wine,
bottles
B home exports & = 50
=point
give up 2 isjust another
yard of
wheal
⑤ +
when
Home starts
exporting
*
Foining up the points
,
Al B1 , c
,
Al B' +
flat portion
is special feature of
a
* ppf is a straight
wrie
* so it steat and rises
beyondc! -
#
MPL is constant &
, comp
perfectly
Revision B
①
⑤ CHAPTER O2 e
&
I am going to
takesa
Labourisc ar
wineboth Homen
do so well
Breathe, prod a
ion
understand ~
-
& genous 2 goods 2 countries
& & e
,
*
output home
Absolute adv :
# free entry e exit ③
producing & of goods, a
perfectitur no
transportation
messumptions
same resources
compositive adv: - cost
I goods
Producing ④
more efficiently ,
Lower cost
-
I factor off=
our
How to calce only
Example : Absolute Absolute odL >
- Labour is fully employed : all work in
Home oteaend
H f = wine) cloth
- Noone remains idle
c23
z
2 - is each
wI
supply of 1
.
*
country is
fixed
Foreign
I
has an
absolute can
in both >
-
keep on ↑ Labour,
goods
372 units of Holte output a by same
amount
271 bushels of wheat -
O
Example: comp Home counter
F ppf linear
↓
doct
mode
/3/5 MPL
xE50o
t
mouxoconta
slope
is
↑ Home's oppoost =
3 = 15
.
# Foreign's opplost 06
-
=
= .
: 80 I what
* foreign has a comp ↓ MPL coXh
-
advantage in wheat slope of good on Y How much cloth
Xax is should be given
Wheat: Labour will be hired to point : =
to obtain
up
cloth PC wheat
&
: MPLc X
- -
wheat =
MPL wX Pr solving for
wages
in terms
FOREIGN ERM L TRADE * payments
good
AUTARKY E
Ca
MPLL
: highest point Home : MPL =
4
- of utility , no w
B MPLL trade 22
=wx
realw
100
·
U2
-
↓
4
:
* opp cost of w
RPOt
=
813
( - wheat Pot
R
① consumer 20 Yare
X cott
MC
indiff bito <U under x( =
100 w
A2B
cannot
po
⑨
f: mc
bushelw PW =
1x
3/2
, Home export
supply curve
& free trade
3
Home Consumploi
Home export
Pat
and productions
woth
supply were
N N
Gobusines
50
40
⑧ ②
-j- !d &
of wheat
in
=
25 ul
I
i B It
4050 100 powreat 7 Exports
of
wheat
① A - considering the no trade ea;
with price at 12 ,
the exports are o
,
NOTE because no international trade
↓
A in panel (a)
Pw =
oppcotine corresponds
T
eg
= 2
e to A in panel (b)
To Obtain 2
of wine,
bottles
B home exports & = 50
=point
give up 2 isjust another
yard of
wheal
⑤ +
when
Home starts
exporting
*
Foining up the points
,
Al B1 , c
,
Al B' +
flat portion
is special feature of
a
* ppf is a straight
wrie
* so it steat and rises
beyondc! -
#
MPL is constant &
