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Course: AP??/College Microeconomics?>?Unit 1
Lesson 4: Comparative advantage and trade- Comparative advantage, specialization, and gains from trade
- Comparative advantage and absolute advantage
- Opportunity cost and comparative advantage using an output table
- Comparative advantage and absolute advantage
- Terms of trade and the gains from trade
- Input approach to determining comparative advantage
- When there aren't gains from trade
- Comparative advantage worked example
- The terms of trade
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The terms of trade
Problem
Using the same amount of time and resources, Tomer can either write lines of code or process reports, and Charlotte can either write lines of code or process reports.
Which of these trading prices will Charlotte and Tomer agree on if they specialize and trade?