Before we dive into this final post, here’s a superb video that sums up what we have been learning all week. Check it out!
The implications of what we discussed yesterday are profound for modern society. Most of you reading this will end up working in specialised jobs that take advantage of your unique talents. For your skills to add value to society, you don’t have to be the best1; you just need to have a comparative advantage.
Yesterday we reached the conclusion that comparative advantage led to gains from specialisation, provided that trade is allowed. Now let’s go a bit deeper. We will start by looking at yesterday’s question of the day.
Did you manage to figure it out? Let’s take a look at the combined PPC for the both of them.
You have been shortchanged so far. Tremendously so.
We asked — How to produce; we answered — produce on the PPC!
We asked — What and how much to produce; we answered — produce on the right point on the PPC!