About This Chapter
Comparative Advantage, Specialization and Exchange
Sometimes in order to boost sales and get the most from the market, businesses must use certain strategies and play economic cards that will make things turn out in their favor. However, if business owners aren't aware of such things, they can become lost in the shuffle and their businesses will suffer. In these lessons, you'll learn about concepts that will give you an edge and allow you to understand how to best use your economic knowledge in business.
The lessons will teach you about specialization in relation to opportunity cost. You'll learn how to make the most of limited resources to produce the best results. As you watch our videos, see how opportunity cost, trade and specialization all come together to benefit you the most.
Through examples, our lessons on comparative advantage will help you to understand the definition and real world use of this concept. You'll study how businesses make crucial decisions about products and services based upon production abilities and material availability.
Lessons will move into talk of specialization and trade. See how gains can be made from trade and how specialization can bring major benefits in business. Study how specialization and trade is beneficial for everyone.
Do you know about the economic principle of absolute advantage? After watching our video lessons, you will know what it is and how it is applied in the market. Study examples to see how gaining an absolute advantage is achieved and the way it gives businesses an advantage over the competition. Thanks for watching!
1. Comparative Advantage: Definition and Examples
Understand the definition of comparative advantage, using two goods as an example. This key lesson incorporates the basic foundations of economics into one foundational theory explaining what goods and services that people,and nations, should produce and for whom they should produce it.
2. Gains From Trade and the Benefit of Specialization
Explore one of the most widely accepted ideas in economics - the idea that nations benefit from specialization and exchange, reaping gains from trade.
3. Absolute Advantage in Trade: Definition and Examples
In this lesson, you'll learn what absolute advantage is and how to easily identify it within examples of international trade. In addition, you'll learn the important difference between absolute advantage and comparative advantage.
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Other chapters within the Economics 102: Macroeconomics course
- Scarcity, Choice, and The Production Possibilities Curve
- Demand, Supply and Market Equilibrium
- Measuring the Economy
- Inflation Measurement and Adjustment
- Understanding Unemployment
- Aggregate Demand and Supply
- Macroeconomic Equilibrium
- Inflation and Unemployment
- Economic Growth and Productivity
- Money, Banking and Financial Markets
- Central Bank and the Money Supply
- Fiscal and Monetary Policies
- Foreign Exchange and the Balance of Payments
- Inflows, Outflows, and Restrictions
- Studying for Economics 102