Let's Make a Deal: The Gains From Trade
Limits and Possibilities
Production Possibilities Frontier (or PPF)
Main Facts About the PPF
Shifts in the PPF
Economic Growth
Expansion of the U.S. PPF Since 1890
A Key Example of Gains From Trade
Before Trade
Steve’s PPF
Lauren's PPF
Steve and Lauren Together
After Trade
Opportunity Costs in the Two-Student Example
Comparative Advantage and the Gains from Trade
Hint on Finding Comparative Advantage
Comparative Versus Absolute Advantage
Diversity and Values
Gains from Trade and Positive-Sum Games
Economic Efficiency
Economic Inefficiency
Comparative Advantage and Efficiency
Sharing the Gains From Trade
Two-Student Example with One Wall and One Window to Repair
Hour-For-Hour Trade
Comparing the Two Trades
Fairness, Equity and Justice
Different Ideas of Fairness
Different ideas of fairness:
Fairness and Rules
Competition and Gains From Trade
Is Economic Efficiency Good?
How Taxes Create Economic Inefficiency
A Tradeoff between Equity and Efficiency
A Note on International Trade
Appendix
When is the PPF curved?
Production Possibilities Curve
PPT Slide
Email: stoc@troi.cc.rochester.edu
Home Page: http://www.econ.rochester.edu/eco108/ch3/summ3.html
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