Charlie, by increasing his absolute advantage, was able to get a better deal in negotiating for plates. Before, he traded 1 cup for 1 plate but now even though he is still producing cups, he can trade 1 cup for 2 plates. At the end of the day they both win through trading but Charlie wins more since he invested that money in gaining absolute advantage.
Only in absolute terms. Charlie has a larger economy, therefore while it may appear his gain is more, but percentage-wise it doesn't necessarily have to be so.
You are super awesome at a explaining it for me I had a real time understanding it by reading the text book . Test is in two days you've helped me a lot. Thank you.
Something is incorrect here. If you are looking at an output graph or table, you don't know how many inputs there were. It doesn't matter. All you know is that the tradeoff leads to each (country) having a different comparative advantage as long as the PPFs are not parallel. You can assume that each country is doing its best - whatever the inputs. (Even if it wasn't doing its best - it doesn't matter for this example.) If the slopes of the two PPFs are different, there are advantages to trade. The stuff about inputs here is confusing. All you need to know is that the PPF is given. Also, the example should be between countries. Then, people are not thinking of Patty or Charlie - where individual effort is more apparent than an entire country so we are not thinking of two people where the student may cloud their mind by thinking about hours, effort, laziness, whatever. In your example - if someone becomes more efficient - again better to think of a country. Otherwise, you start thinking that one of the people worked more hours, or got a new machine. Again, it doesn't matter.
YOu live in a dream world. Read a bit of history on England and the USA and tell me if they got to their situation because they opened up their own markets. Read "Bad Samaritans" by Ha Joon Chang and learn something before repeating this that you justheard somewhere which is disconnected from reality.
Ok, now show the Prebisch critique of this abstract/unreal idea of specialization and trade based on comparative advantage that benefits all. Do the world a service and stop repeating this ideology which passes as science. The world does not work according to this.
# 2 plates 1 cup
+a Haraldh Was watching the video and wanted to post exactly the same, but then i saw your comment :(.damn
lmao, wasn't just me!
what is wrong with that? he is not wrong...
to summarise: trade is based on Comparative Advantage NOT Absolute Advantage!.
No its is based on HO theory of international trade ✌️... Its d most modern theory explainin why trade happens
Charlie, by increasing his absolute advantage, was able to get a better deal in negotiating for plates. Before, he traded 1 cup for 1 plate but now even though he is still producing cups, he can trade 1 cup for 2 plates. At the end of the day they both win through trading but Charlie wins more since he invested that money in gaining absolute advantage.
Only in absolute terms. Charlie has a larger economy, therefore while it may appear his gain is more, but percentage-wise it doesn't necessarily have to be so.
Anyone else think about something when Khan said "2 plates and 1 cup"? xD Anyway, really nice video. Helps me with studying for my exam. Thanks Khan!
wow this was actually pretty interesting. I never thought economy could be so cool.
You are super awesome at a explaining it for me I had a real time understanding it by reading the text book . Test is in two days you've helped me a lot. Thank you.
Studying this before my exam!! I understand it completely now thank you
How was your exam ?
khan academy saved my DEC and BA luv you!!!
Luv u too
Brilliant Explanation!
These are the best i was thinking bout AP Macro is there vids for that tooo?
Thanks this really helped!
This helped me so much, thank you.
Man, bless you .. you are amazing
thanks vlad
is it possible to have both the absolute and comparative advantage?
guess if their PPF is parallel
hawaii137 no
Absolutely Understood ! I was give a tumbs up
Awesome.. thank u so much.. easy language and great conveyance power u have.
oh i just wanted to read this again.
THanks!
i love your work your my hero
p.s i didnt watch the video i just wanted to say thanks :D thanks man!
So do we always use the x axis when determining the OC?
Omg thanksss. This helped alot
Something is incorrect here. If you are looking at an output graph or table, you don't know how many inputs there were. It doesn't matter. All you know is that the tradeoff leads to each (country) having a different comparative advantage as long as the PPFs are not parallel. You can assume that each country is doing its best - whatever the inputs. (Even if it wasn't doing its best - it doesn't matter for this example.) If the slopes of the two PPFs are different, there are advantages to trade. The stuff about inputs here is confusing. All you need to know is that the PPF is given. Also, the example should be between countries. Then, people are not thinking of Patty or Charlie - where individual effort is more apparent than an entire country so we are not thinking of two people where the student may cloud their mind by thinking about hours, effort, laziness, whatever. In your example - if someone becomes more efficient - again better to think of a country. Otherwise, you start thinking that one of the people worked more hours, or got a new machine. Again, it doesn't matter.
nah
thanks sir, you are amazing.
YOu live in a dream world. Read a bit of history on England and the USA and tell me if they got to their situation because they opened up their own markets. Read "Bad Samaritans" by Ha Joon Chang and learn something before repeating this that you justheard somewhere which is disconnected from reality.
Right, such a free market when you’ve got two digit tariffs on nearly everything
Is it bad that I want little animated Patty and Charlie? With towers of cups and plates falling all over the place?
+Felicia Cravens yo Talisha!!
7:55 2 plates 1 cup :D
LOL
thank you so much (:
Is opportunity cost does matter in absolute advantage in any way ?
thx!!! it's seriously easy to understand abour economics :D
40 - 10 = 20?
question if c produces bananas usin g more labour capital etc what would c have
Does anyone else think he sounds a lot like Tom Hanks?
am i the only one that doesnt get audio?
Yes. Your internet is boo boo.
@QuasiBelgium come on.... there are kids watching this
2plates1cup?
lol if they got that reference then i think they are fairly screwed already
I'm 2 years old (srs)
How old are you now?
I know, rite like "Wake up sheeple" LMAOROFL
Ok, now show the Prebisch critique of this abstract/unreal idea of specialization and trade based on comparative advantage that benefits all. Do the world a service and stop repeating this ideology which passes as science. The world does not work according to this.
If kids can get that joke, its bad enough. haha
2 girls one cup
im so immature i keep laughing when he says ppf bc pp ahhahahhhaha
Can't stop laughing
@Sabrijabro go outside kid
Rofl
khan makes a lot of verbal mistakes
your voice is so hot