Title

(4) The PPF and Comparative Advantage

Topic Category

Production Possibilities Frontier

Publication Date

2010

Keywords

Production Possibilities Frontier, PPF, Comparative Advantage, Absolute Advantage, Gains from Trade

Abstract

The concept of comparative advantage is explained and contrasted with absolute advantage. Comparative advantage is shown to be the basis for mutual gains from exchange.

Run Time

9:54

Primary Discipline

Microeconomics

Skills Delivered

Ability to Calculate Terms of Trade. Ability to identify Absolute and Comparative Advantage. Ability to determine who should specialize in what. Ability to demonstrate mutual gains from trade.

Rigor Level

2000

Prerequisites

Previous PPF Videos



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