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Economics by Terry Hillman

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CHAPTER3

Comparative Advantage and Gains from Trade

In This Chapter

  • Introducing modeling in economics
  • Using the concept of opportunity cost to make production decisions
  • How the production possibility frontier illustrates the trade-offs needed for productive efficiency
  • Comparative advantage and gains from trade
  • How comparative advantage works in international trade

Opportunity cost, efficiency, and gains from trade are fundamental concepts that were introduced in Chapter 2. They encompass much of the foundation of economic analysis in both microeconomics and macroeconomics.

This chapter will continue and expand the discussion of opportunity ...

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