Etp econ lecture note 3
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Etp econ lecture note 3
- 1. GAINS FROM TRADE ETP Economics 101 Lecturer: Jack Wu
- 9. THE FARMER ’ S PRODUCTION POSSIBILITIES FRONTIER Potatoes (ounces) 0 Meat (ounces) (a) The Farmer ’ s Production Possibilities Frontier 8 32
- 10. THE RANCHER ’ S PRODUCTION POSSIBILITIES FRONTIER Potatoes (ounces) 0 Meat (ounces) (b) The Rancher ’ s Production Possibilities Frontier 48 24
- 12. OPPORTUNITY COSTS 1oz of meat 1oz of potatoes Farmer 4 oz of potatoes ¼ oz of meat Rancher 2 oz of potatoes ½ oz of meat
- 23. THE FARMER ’ S PRODUCTION AND CONSUMPTION WITHOUT TRADE Copyright©2003 Southwestern/Thomson Learning Potatoes (ounces) 0 Meat (ounces) (a) The Farmer ’ s Production and Consumption 4 16 8 32 A Farmer's production and consumption without trade
- 24. THE RANCHER ’ S PRODUCTION AND CONSUMPTION WITHOUT TRADE Copyright © 2004 South-Western Potatoes (ounces) 0 Meat (ounces) (b) The Rancher ’ s Production and Consumption 12 24 B 48 24 Rancher's production and consumption without trade
- 29. HOW TRADE EXPANDS THE FARMER ’ S SET OF CONSUMPTION OPPORTUNITIES Potatoes (ounces) 0 Meat (ounces) (a) The Farmer ’ s Production and Consumption 4 16 5 17 8 32 A A* Farmer's production and consumption without trade Farmer's consumption with trade Farmer's production with trade
- 30. HOW TRADE EXPANDS THE RANCHER ’ S SET OF CONSUMPTION OPPORTUNITIES Potatoes (ounces) 0 Meat (ounces) (b) The Rancher ’ s Production and Consumption 12 24 13 27 B 48 24 12 18 B* Rancher's consumption with trade Rancher's production with trade Rancher's production and consumption without trade