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Comparative Advantage and Gains From Trade (Part 1)

193 ratings | 90006 views
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. For more information and a complete listing of videos and online articles by topic or textbook chapter, see http://www.economistsdoitwithmodels.com/economics-classroom/ For t-shirts and other EDIWM items, see http://www.economistsdoitwithmodels.com/merch/ By Jodi Beggs - Economists Do It With Models http://www.economistsdoitwithmodels.com Facebook: http://www.facebook.com/economistsdoitwithmodels Twitter: http://www.twitter.com/jodiecongirl Tumblr: http://economistsdoitwithmodels.tumblr.com
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Text Comments (36)
KARD hugefans (2 months ago)
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
Patrick DeCesare (1 year ago)
This made me open pornhub
lewiis chanfo (2 years ago)
you need to make more videos so this channel can take off for educational reasons only
joukcrew03 (2 years ago)
The book I am following nor my lecturer's cryptic notes were clear in explaining these concepts. Thank you for posting this.
BananaH3ro1 plus (3 years ago)
Wow you are hot and have a sexy voice, that said great explanation clear and simple thank you.
Angela Sladen (3 years ago)
And the secretary to be a woman....
Angela Sladen (3 years ago)
Great videos!  Interesting that you chose the Professor to be a man.  :-)
Leon Lindsey (4 years ago)
that was a lot of hair to lose!
Jo Va (4 years ago)
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.
Logic Time (5 years ago)
really helped me.. thank you Jodi
Ahmed Saleh (5 years ago)
Jodie, you were great choosing simple examples to illusttrate your points. Thank you vey much.
Benj Arriola (5 years ago)
How are you supposed to concentrate on this. I'm just watching not thinking.
hunger993 (3 years ago)
+Benj Arriola write it down as you watch. Doing it with your hands puts it into your head
Michael Grey (4 years ago)
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.
Peter Hermina (4 years ago)
i know that feel bro 
Troy McClintock (5 years ago)
You are gorgeous, thanks for the help but couldn't stay focused
justplainly (6 years ago)
Jake Holmes (6 years ago)
im full
Divine (6 years ago)
I'd fail NASTY if this was my Professor.
Antonyyeaah (6 years ago)
It can apply even down to the individual level.
Lee H. (7 years ago)
Thanks for all your posts, very helpful. Clever logo by the way.
Kebo Wallace (7 years ago)
of topic for what i'm looking for
Alessandro Paratore (7 years ago)
@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?
jodiecongirl (7 years ago)
@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?
Alessandro Paratore (7 years ago)
Is it true that comparative advantage should be applied to only macro circumstances and not micro?
jodiecongirl (7 years ago)
@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.
Ehsan Konjkav (7 years ago)
the example could have been better rather than fraction
Mr. Kentish (7 years ago)
by far the best econ teacher on youtube! both in appearance & teaching ability :D thnkxx alot!!!
Seu Zeca (7 years ago)
I wanna trade those curves....
librarychair (7 years ago)
awww, default gender roles.
RoseBing (8 years ago)
Thank you I understand it now!
Amanda Mahbobi (8 years ago)
Hi Judi, I am an MBA student and need to know this for my quiz next week. I want to thank you for your clear and systematic explanation of the concept .I got it now!
SuperAndrei82 (8 years ago)
You have a really good speaking voice.
jodiecongirl (8 years ago)
@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.
Dirty Bubble (9 years ago)
you rock my socks
Schulahful (9 years ago)
Where have you been all my life (this last semester)!

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