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‘Tmeories & Current Practices of Internation ‘the Rearaian Model: Labour Pradvetvty & Comparative vareage + Theos f why ade occurs: rea oe rete rotcen ‘hat ad Yoon am se Menno rey pi! Comparative Advantage and Opportunity cost he Reet de neh cones Sapam ent nd cmcaraove Soratage, 1 The opporunty cost of producing {oatlog eee he cot Sot beng Shea pruee something ese wit he ‘essa oes + For examee,alinted cumber of workers coulé produce ether roses Sreomputers. “Haan aes “Ruinerionres “cpus + Suppose at nthe W510 mon ses ‘uid be prosuecd wth some rescues ‘ot cou produce 10,000 computes + Suppase hatin Colmbi 10 millon roe ‘ul be prosacad wh te se rss frat eeadSroaace 30 000 ampere Producve ton Woven tbe U.S Iromiectingeameuters + calomeia nes a one opportunity cost of ‘roduc roe “pared Leis cous ar cot 1 RU gp acne epaanty ot erties sRearranep meron “A county nas 9 comparative vantage inproaing 9 poco the oppor cat ‘proucng tat god leaner ie fete een athe eons =e a empante earaene «a ot ae Sen AS, ‘can born counties be made bt > ‘Comparative Advantage and Trade ‘One-Factor Ricardian Model ‘The simole eamoie wee roses and ‘elon me + Constructing nwfactr Redan madd (in the ong arson: ‘The assumptions are: + taors the en fr of prosctn eigen ove sumer Sneha to Utena 7. tpternational trade Is free from al! Sia Septem n com 2. Bg Forney oe © Gees cts ea a ue ‘Sroustof ereocies 8 am 4. Tooele tana cet o.rausin gw ‘Therefore, What Is the Gains From Trade? + Ga fm ed ce kom peta + Domai wrars tm abn ioe ‘netype at rsacion mich frm ance peductonbecrure the, ‘abr econ, a ig te tise es a oth een th vate Seon gees at rata f + Ferogn noses am 3 ihr nam hm etn ones SP8 Sees ies coves “reheose deweests th trace (aking eats renege tye Sass soe) ea se brooch cares ches ite + congugtion posses expand beyond + wth ade, «coun has to alste tree owed nt rome men ‘ures oped alo the goeds + Wn wae consumgson in be arts + wn ade» coy ca pec ‘pana be och county eps a brotucen and auensnge otha mk fredvong te godin none hes 8 ous tha wants to ansume Eamporetveaevantace, ‘wnat are Relative Wages? "Sanna Stae . org sender tome counees BESS i han tear ar aint ergs roan * Ghee Strsatelfocgrecierm ete eer SLES ae Se hon ‘D0 wagas Reflect Productivity? ‘rosuetbas othe to cours? + deca shows tat on wages 26 ‘asc wt om product song gen nenene srustras However tere are catan Macon Cepttons about compares dranage? “Satara agar “eee Ee 2. ere et ae pose cute compas ronan apes ee seasnemeenes vomits. een “gamers “Rieger rosie ate nap trie oe + mami ed oe ee. al Geant. area ‘Transportation Costs and Non- traded Goods + Te arin cel rats tat ‘Ts Sho eoepita spec ruc, «babi rly nappens fr tree mon + Nowra gods nd serie ore, Foes and nto vest) exit Ov ah Uroepet costs “Pee nnoneans Empirical Evidence “Raa i” Shapes eee “Seeman

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