Thank you for making the theory so simple. Of course there are so many other issues, but when you strip it down to the basics, with simple examples, it makes sense and a lot simpler than trying understand it using the textbook only.
Nice video, but what about shipping costs and import/export taxes and tariffs? Or even varying currency exchange rates between countries? Wouldn't these examples assume it's completely free to trade between countries?
@Webmagery This model assumes COMPLETE specialisation - each country must specialise in one item only. The opportunity cost of producing DVDs (instead of wheat) for South Africa is greater, and so even though it has absolute advantages in the production of both goods, it will concentrate it's production upon Wheat to generate the largest gains and will allow Japan to specialise in the production of DVDs.
@saradani79 International trade: a European text (Brenton, Scott, Sinclair) is brilliant, whether you are interested in the additional EU analysis or not; the fundamentals are well explained.
Great production quality. One problem though: if there are no computers, DVDs are worthless. I didn't here that other products were produced domestically. Maybe a little bubble explaining that would help. Another approach to this issue is asking how many people die from starvation in either country from choosing to produce a DVD instead of a bag of wheat. The wheat versus wine example makes more sense. Both have calories. Wheat versus beef or wheat versus soybeans would make more sense practically. Rice versus beef would also make sense.
What if south Africa can make a profit of $6 per DVD while they will only make a profit of $1 per bag of of wheat? Should they still make wheat instead of DVDs?
why would ,for example, a good bought from a country that can effectively and cheaply produce it mean that good would be cheap?Diamonds are very expensive yet there absolutely common and easy to produce.
diamonds are not cheap because they are not common. Lower grade, smaller diamonds are more common. That is why they are cheaper. But high grade, larger diamonds are very rare. They may be abundant in one country but the global demand determines the price allocated to it.
dnbGonzalez if i remember correctly, theres a monopolistic aspect to diamonds that theres one major company who holds most of the diamond supply which keeps the demand artificially high because the company limits how much of the product goes out to be sold.
What if Japan has the same opportunity cost as South Africa to produce DVD and wheat, just like Japan can produce 4 DVDs or 20 wheat while South Africa can produce 8 DVDs or 40 wheat. Should South Africa trade with Japan in this case?
Willa Ho in this case , neither country would benefit from trade , the only think you could say is that Japan has the absolute advantage in neither and South Africa has absolute advantages in both. Hope this could help!
In this case he is only considering the opportunity cost to be the "lost production of the OTHER good". I agree that there are lots of factors that can comprise opportunity cost in the real world. For example, what is the opportunity cost of specializing too much and not developing other (potentially more profitable) products in the future. There are other factors like transportation costs to markets as well as transportation costs of inputs from their respective sources. Real life is messy, but in a narrow sense his example still holds true. Once you bring in other possible opportunity costs, well, that changes everything.
Logos AO I tend to think economics is for people who like to navel gaze. The theories in economics are all assumption-based and hold to ceteris paribus (all other things being equal). You never see such a concept in the real world.
The theories are still useful. This simple theory can help people see that there are some economic benefits to international trade. Of course, DVDs are useless if there are no other products in this world.
This is nonsense, a factory will produce just as well irregardless of location, all goods should be sold at world prices, and therefore given world priced labour (Which can be insourced if needed), no country can have a comparitive advantage past the primary sector... Any differences are the result of regulation, regulation should change not buisnesses...
This is a very simple and efective alternative to teach the theory on international trade. Congratulations !
Thank you for making the theory so simple. Of course there are so many other issues, but when you strip it down to the basics, with simple examples, it makes sense and a lot simpler than trying understand it using the textbook only.
IF YOU NEED TO....
cliffhanger is painful... :(((
Best. Ending. Ever.
If you need to...
WHAT DO I NEED TO DO? lol at least I understood it or I'd be in trouble
Clear and explicit. Thank you.
Very Clear and easy to understand - Thanks!
+Ann Skinner SKINNER!
Very well understood, simple and precise example of two countries
Clear, concised and simple fundamentals for the genesis of International Trade..Thanks. I have subscribed and liked...cheers
Nice presentation! Clear, concise and to the point, with easy to understand examples. :)
Nice video, but what about shipping costs and import/export taxes and tariffs? Or even varying currency exchange rates between countries?
Wouldn't these examples assume it's completely free to trade between countries?
Thank you SIr! That was helpful. I am going to write this in my exam today :)
really nice...............cleared my concepts.nice
Very simple presentation, thanks.
This video is somewhat wholesome
@Webmagery This model assumes COMPLETE specialisation - each country must specialise in one item only. The opportunity cost of producing DVDs (instead of wheat) for South Africa is greater, and so even though it has absolute advantages in the production of both goods, it will concentrate it's production upon Wheat to generate the largest gains and will allow Japan to specialise in the production of DVDs.
Thank you sir.....it's very helpful....
@saradani79 International trade: a European text (Brenton, Scott, Sinclair) is brilliant, whether you are interested in the additional EU analysis or not; the fundamentals are well explained.
Gd explanation 😃😃😃
Great production quality. One problem though: if there are no computers, DVDs are worthless. I didn't here that other products were produced domestically. Maybe a little bubble explaining that would help.
Another approach to this issue is asking how many people die from starvation in either country from choosing to produce a DVD instead of a bag of wheat.
The wheat versus wine example makes more sense. Both have calories. Wheat versus beef or wheat versus soybeans would make more sense practically. Rice versus beef would also make sense.
But lets say that when you sell a dvd producer you can buy a few bags of wheat.
Easy to understand, thank you
Superb.
Amazing
Good Video
Finally! I get it. THANK YOU
IF I NEED TO WHAT???? TELL ME!
if u need a friend like him!
Japan can make a 10 DVD's of HEntai in just only in 10 seconds
1000 DVD's in less than 1 second, bro.
What if south Africa can make a profit of $6 per DVD while they will only make a profit of $1 per bag of of wheat? Should they still make wheat instead of DVDs?
very well explained
what does international trade do to a nation's domestic production possibilities?
Can you please explain the cost per DVD
too good sir thanks a lot
Nice sir thanku sir
what's the name of the instructor?
actually i need the different between modern theory nd ricardian therory can u help me
Well appreciated
how to get this video,.
Good one! Thanks!
currently watcing this in econ
best video ever
Thank u very much!
why would ,for example, a good bought from a country that can effectively and cheaply produce it mean that good would be cheap?Diamonds are very expensive yet there absolutely common and easy to produce.
diamonds are not cheap because they are not common. Lower grade, smaller diamonds are more common. That is why they are cheaper. But high grade, larger diamonds are very rare. They may be abundant in one country but the global demand determines the price allocated to it.
dnbGonzalez if i remember correctly, theres a monopolistic aspect to diamonds that theres one major company who holds most of the diamond supply which keeps the demand artificially high because the company limits how much of the product goes out to be sold.
What about Covid-19
What if Japan has the same opportunity cost as South Africa to produce DVD and wheat, just like Japan can produce 4 DVDs or 20 wheat while South Africa can produce 8 DVDs or 40 wheat. Should South Africa trade with Japan in this case?
Willa Ho in this case , neither country would benefit from trade , the only think you could say is that Japan has the absolute advantage in neither and South Africa has absolute advantages in both. Hope this could help!
Thanks ^_^
Actually I need heckscher ohlin theory also
You sound like Thoughty2
He sounds like David Mitchell!
Thank you.
Clear as day.
nice!
2:32 to apple ... listen pls
EFZG FOR LIFE
These economic theories are rather silly. Who decides the opportunity costs? Do we all gather together as nation and analyze this stuff? Pfft.
In this case he is only considering the opportunity cost to be the "lost production of the OTHER good". I agree that there are lots of factors that can comprise opportunity cost in the real world. For example, what is the opportunity cost of specializing too much and not developing other (potentially more profitable) products in the future. There are other factors like transportation costs to markets as well as transportation costs of inputs from their respective sources. Real life is messy, but in a narrow sense his example still holds true. Once you bring in other possible opportunity costs, well, that changes everything.
Logos AO
I tend to think economics is for people who like to navel gaze. The theories in economics are all assumption-based and hold to ceteris paribus (all other things being equal). You never see such a concept in the real world.
The theories are still useful. This simple theory can help people see that there are some economic benefits to international trade. Of course, DVDs are useless if there are no other products in this world.
This is nonsense, a factory will produce just as well irregardless of location, all goods should be sold at world prices, and therefore given world priced labour (Which can be insourced if needed), no country can have a comparitive advantage past the primary sector... Any differences are the result of regulation, regulation should change not buisnesses...
Yeah I find this theory bogus as well, even enslaving
example country a produces hundreds of business educated persons and country B produces wheat
when it said whet, i thought it said weed
Clear as day.