Trade Lesson 2 Global Trade Theory I: The Ricadian Theory of Comparative Advantage
  
 
 
 
Trade Lesson 2 Global Trade Theory I: The Ricadian Theory of Comparative Advantage

Overview

This lesson provides us with the understanding of the classical Ricardian trade model of comparative advantage based on labor productivity, and the relevant concepts and tools: the production possibility frontier, opportunity costs, specialization, and direction of trade.

Relevant Learning Objectives

2. Understand the classical Ricardian trade model of comparative advantage based on labor productivity, and the relevant concepts and tools: the production possibility frontier, opportunity costs, specialization, and direction of trade.

Procedure

Pre-Class Assignments

  • Students should read Chapters 3 of the textbook Principles of Microeconomics

Possible Classroom Activities

Resources 

  • Global Trade Lesson 2.pptx.
  • Mankiw, N.G. (2008). Interdependence and the Gains from Trade. Principles of Microeconomics, 5th Edition, South-Western Cengage Learning. 

Optional Resources

 

NextTrade Lesson 3 Global Trade Theory II: The Heckscher-Ohlin Model of Comparative Advantage