This video introduces the concepts of opportunity cost, absolute advantage and comparative advantage via an example that asks the question "Should a professor do his own typing?" This is the part 1 in a two-part series.
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By Jodi Beggs - Economists Do It With Models
what is the easier way to understand the CA in this case? Can I say the opportunity for the sec. is that she still be able to reach the limit of typing that the prof has while the prof has already achieve the limit or near limit
Wowzers, Jodie must be a model with a deep passion & understanding of micro/macro-economics. Keep up the great work, and I really like your hair, and your pretty black dress, it made my morning much brighter, thanks.
do what i do, make notes of the things you learn from the presentation as you go along. when you get something, pause and write it down in your own words, then un-pause and continue. in here you see a string of explanations, its not a single bulk lecture in history. hope that helps.
@jodiecongirl Thanks. I went on your website and really enjoyed it--I'm definitely coming back to it.
I want your opinion on negative externalities and market-based policies that align private incentives with social efficiency. To reduce traffic congestion on a highway, are you more incline towards variable tolling, say by the hour, or a gas tax within the area? I know other factors must be taken into account when implementing these policies, however, what’s your gut feeling on this?
@9750711 For some reason, comparative advantage is often taught in the context of countries trading with each other at a macro level, but the concept applies to trade in individual markets as well (i.e. micro). For example, we're using these principles every time we buy stuff rather than making it ourselves, right?
@EtherealStudent Yes- in that case, opportunity cost if the value of the BEST foregone alternative. In this setup, that gets a little complicated since you can't immediately tell what outside option is better without knowing what people want to consume.
@EtherealStudent Technically speaking, opportunity cost is the value of the best foregone option, so if you have three possible activities, the opportunity cost is the value of the better of the two options that you didn't pursue. For example, if you take a job that pays $50K and turned down offers of $30K and $25K, your opportunity cost of taking the job is $30K, and you made the right choice (at least financially) since your benefit ($50K) is larger than your opportunity cost.
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