The Six Stages of Economic Integration (Holiday Special!)

In the first stage of integration my trading partners gave to me, access to certain products duty free! This special holiday lesson will introduce the different ways nation’s economies integrate with one another and remove trade barriers, from the lowest level of preferential trade agreements to complete economic integration! All with a little holiday cheer and some singing thrown in for good measure!

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Determining Comparative Advantage using PPCs – Worked solutions to AP Free Response Questions

Free trade based on the principle of comparative advantage promises to maximize the efficiency with which the world’s resources are allocated. But how do we know whether a country has a comparative advantage in the production of one good over another compared to its potential trading partners?

In this lesson we will work our way through several Advanced Placement Free Response Questions and show how, using production data from a PPC or a production possibilities table, we can calculate opportunity costs for particular goods in different countries, and then determine how countries stand to gain from trade based on comparative advantage.

 

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