ECO 2030. Principles of Economics-Price Theory

Gains from Trade

Trade Creates Value

  1. Production Possibilities
  2. Specialization and Trade

Principle of Comparative Advantage

  1. Absolute Advantage
  2. Comparative Advantage
  3. Specialization and trade

Sources of Comparative Advantage

  1. Labor productivity
  2. Factor proportions
  3. Specific factors
  4. Economies of scale