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Outline - Introduction to Economics | ECON 101, Study notes of Economics

Material Type: Notes; Professor: Sekhposyan; Class: Introduction to Economics; Subject: ECONOMICS; University: University of North Carolina - Chapel Hill; Term: Unknown 2007;

Typology: Study notes

Pre 2010

Uploaded on 03/10/2009

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Outline
1. Math Review
a. How to read a graph of a line?
b. How to graph a linear equation?
c. Slope of a curve
2. Production possibilities frontier (PPF)- shows combination of output that the
economy can possibly produce given the available factors of production and
available production technology.
PPF highlights the ideas of scarcity, efficiency, trade-offs, opportunity cost and
economic growth (Refer to the graphs in the lecture for the details.)
3. Gains from Trade
absolute advantage - the ability to produce a good using fewer inputs than another
producer
comparative advantage - the ability to produce a good at a lower opportunity cost
than another producer
A producer can still benefit from trade if he/she has no absolute advantage in any
of the products produced. Comparative advantage is what matters!
Tatevik Sekhposyan ( UNC-Chapel Hill) Introduction to Economics - Lecture 2 May 16, 2007 1 / 1

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Outline

  1. Math Review

a. How to read a graph of a line?

b. How to graph a linear equation? c. Slope of a curve

  1. Production possibilities frontier (PPF)- shows combination of output that the economy can possibly produce given the available factors of production and available production technology.

PPF highlights the ideas of scarcity, efficiency, trade-offs, opportunity cost and economic growth (Refer to the graphs in the lecture for the details.)

  1. Gains from Trade

absolute advantage - the ability to produce a good using fewer inputs than another producer comparative advantage - the ability to produce a good at a lower opportunity cost than another producer

A producer can still benefit from trade if he/she has no absolute advantage in any of the products produced. Comparative advantage is what matters!

Tatevik Sekhposyan ( UNC-Chapel Hill) Introduction to Economics - Lecture 2 May 16, 2007 1 / 1