Episode 34: Comparative Advantage & Trade

[frannyxoxo4]

thank you!

[FreeSoul790]

this was very informative in regards to the topic. thank you.

[TheStfu1000]

does this theory apply to general trade. ie trade within one country between individuals/companies?

[ganon391]

gilligan's island needs to get back on the coconut standard. if you're going to have a leaf-based currency, you need something to back it up. anybody can go pick a leaf off a tree, but you can only grow so many coconuts per year.

[mjmfoodie]

@ganon391 Awesome - you gave me my best laugh of the day.

[74SteveG]

THIS IS AWESOME

[4everFitnessBlog]

Great explanation, but what if the island doesn't need any more huts and people need more fish? I guess another way of saying this is what if the demand for huts is low and the demand for fish is high?

[mjmfoodie]

@4everFitnessBlog Well, comparative advantage is only a theory of the production piece, so you are correct -- the demand side will come into play as well.

Luckily, the entertainment industry decided that there needed to be a 20-year reunion TV show, in which the castaways escape, and then come back to the island to open a resort, so they needed all the huts they could get. :-)

[puttincomputers]

The Comparative Advantage Theory = Keynesian Economics!

[puttincomputers]

Comparative Advantage = junk theory I think.

[Tabur]

I don't agree with the conclusion. Let's say instead of huts skipper and gilligan could produce sand castles every 5 minutes and 2 hours respectively, it doesn't mean one should specialize in sand castles and the other in fishing since sand castles don't give society any benefit. I think a much more appropriate conclusion would be to state that production increases (period). Not necessarily social benefit increases (that happens when you assume that every product gives around the same benefits)

[Welsh77]

@Tabur the point is that voluntary trade leaves them both better off than they would have been before. if two people VOLUNTARILY engage in trade, they will always both be better off afterwards, always. voluntary trade creates wealth. this is an accepted fact in economics. involuntary trade, however, between two people, is just the transfer of wealth, there is no creation.

[mjmfoodie]

@liverpoool4lyf I meant England, but that's because I'm a poor historian -- I was referring to Smith's time (late 1700s), and the "United Kingdom of Great Britain & Northern Ireland" wasn't until 1927. However, it looks like England & Scotland were declared a "United Kingdom" in 1707. In any case, my "map" shows the entire UK, so I'm certainly inconsistent somewhere...

[freshprinceofbalham]

Thankkkkkkkkkkkkkkkkkkkkkkkkkk­kkkkkkkkkkkkkkkkkkssssss

[wutuluknat]

the 6 ppl who dislike this must be econ instractor. it oky we will still come to class for ur bul.... thx for great lesson

[bobbys999]

my homework is to watch this and answer question about it

[malylime]

HAHAHA. AWESOME VIDEO!! thanks gilligan and skipper!

[cafritz]

[LOL] by stating they had enough clothes for years eventhough it was a 3 hour tour!!! Great explnation too! ;)

[rickbar123]

If you ask me Mary Ann had the goods

[mjmfoodie]

Not all of the episodes exist yet -- in fact, I just completed the "reasons for trade restrictions" a few minutes ago. I won't have a chance to do anything on "Types of Trade Restrictions" until over the summer.

[Rinry]

These videos are so helpful to me. But I can not find episode 35 on trade restrictions.

[UmmTahir]

Yes this was very clear. Thanks

[DP1066]

I've listened to at least 10 different descriptions of comparitive advantage and it always went over my head. This time it made sense. Thank you!