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Last edited on 2010-02-08 23:50:12 by WikiNielsio
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{{image class="imgtitle" url="/images/wiki/articles/trade.png"}}======Trade======
=====Why Do We Trade?=====
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{{image class="imgtitle" url="/images/wiki/articles/trade.png"}}======Why Do We Trade?======

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Edited on 2009-11-30 05:08:21 by WikiNielsio

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Edited on 2009-11-30 05:05:24 by WikiNielsio
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{{image url="/images/wiki/print.png"}} [[http://www.vforvoluntary.com/wiki/WhyDoWeTrade/html print]]

Revision [237]

Edited on 2009-11-20 01:36:56 by WikiNielsio
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{{image class="imgtitle" url="/images/wiki/articles/trade.png"}}======Why Do We Trade?======
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{{image class="imgtitle" url="http://img175.imageshack.us/img175/1369/trade.png"}}======Why Do We Trade?======

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Edited on 2009-11-19 18:15:59 by WikiNielsio
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>>{{anchor special="table_of_contents"}}>>

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Edited on 2009-11-19 18:14:11 by WikiNielsio
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{{image class="imgtitle" url="http://img175.imageshack.us/img175/1369/trade.png"}}======Why Do We Trade?======
{{anchor name="Absolute advantage" h3="Absolute advantage"}} Imagine there are two persons A and B who produce product X and Y. One is faster at producing product X and one is faster at producing product Y. Assume these are their productivities for a day's labor, if they produced either product X or product Y:
>>{{anchor special="table_of_contents"}}>>
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======Why Do We Trade?======
>>{{anchor special="table_of_contents"}}>> {{anchor name="Absolute advantage" h3="Absolute advantage"}} Imagine there are two persons A and B who produce product X and Y. One is faster at producing product X and one is faster at producing product Y. Assume these are their productivities for a day's labor, if they produced either product X or product Y:

Revision [162]

Edited on 2009-11-16 03:12:53 by WikiNielsio
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Edited on 2009-11-16 03:09:30 by WikiNielsio
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|=|//{{color text="Productivity" c="#105289"}}//|=|{width:20%}cooking|=|{width:20%}management|=|{width:20%}tennis|=|{width:20%}singing||
|=|person a||300||200||0||0||
|=|person b||120||700||60||0||
|=|Federer||60||0||15,000||0||
|=|Pavarotti||150||0||0||30,000||
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{{image url="/images/trade/realworld.png"}}

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Edited on 2009-11-16 03:03:56 by WikiNielsio
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|=|person b||2||1||
|=|person b||1||0.5||
|=|person a||0||4||
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|=|person a||1||3.33||
|=|person __b__||1||0.66||
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|=|person __d__||1||0.66||
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|=|person b||1||2||
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|=|{width:33%}//{{color text="Trade 1" c="#105289"}}//|=|product x|=|product y||
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|=|{width:33%}//{{color text="Trade 2" c="#105289"}}//|=|product x|=|product y||
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|=|{width:33%}//{{color text="Trade 3" c="#105289"}}//|=|product x|=|product y||
|=|person __d__||1||1||
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Edited on 2009-11-16 02:52:46 by WikiNielsio
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|=|{width:33%}//{{color text="Trade" c="#105289"}}//|=|product x|=|product y||
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Edited on 2009-11-16 02:52:05 by WikiNielsio
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|=|{width:33%}//{{color text="Productivity" c="#105289"}}//|=|product x|=|product y||
|=|person a||6||4||
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|=|{width:33%}//{{color text="No trade" c="#105289"}}//|=|product x|=|product y||
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Edited on 2009-11-15 18:53:06 by WikiNielsio
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{{anchor name="Comparative advantage: example 2" h3="Comparative advantage: example 2"}} In this situation, person A can produce more of X than of Y, but person B can also produce more of X than of Y:
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{{anchor name="Comparative advantage: example 2" h3="Comparative advantage: example 2"}}
In this situation, person A can produce more of X than of Y, but person B can also produce more of X than of Y:

Revision [106]

Edited on 2009-11-15 18:52:45 by WikiNielsio
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{{anchor name="Increasing productivity" h3="Increasing productivity"}} As you saw in the example, being highly productive can be rewarding, especially if you can trade. Another way to increase your wealth is to create products of higher quality, or those that are more rare, so that people may be willing to give up more things for it.
{{anchor name="The real world" h3="The real world"}} If we look at the real world we see that people's productivity shoots way up as people dedicate their whole career on a specialty or on a focused number of skills.
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{{anchor name="Increasing productivity" h3="Increasing productivity"}}
As you saw in the example, being highly productive can be rewarding, especially if you can trade. Another way to increase your wealth is to create products of higher quality, or those that are more rare, so that people may be willing to give up more things for it.
The real world
If we look at the real world we see that people's productivity shoots way up as people dedicate their whole career on a specialty or on a focused number of skills.

Revision [105]

Edited on 2009-11-15 18:52:01 by WikiNielsio
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======Why Do We Trade?======

Revision [104]

Edited on 2009-11-15 18:51:35 by WikiNielsio
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==Why do we trade at all? To answer this question the principles of absolute and comparative advantage can be introduced.==
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Why do we trade at all? To answer this question the principles of absolute and comparative advantage can be introduced.

Revision [103]

Edited on 2009-11-15 18:51:11 by WikiNielsio
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>>{{anchor special="table_of_contents"}}>> {{anchor name="Absolute advantage" h3="Absolute advantage"}} Imagine there are two persons A and B who produce product X and Y. One is faster at producing product X and one is faster at producing product Y. Assume these are their productivities for a day's labor, if they produced either product X or product Y:
{{anchor name="Comparative advantage: example 1" h3="Comparative advantage: example 1"}} In this situation, person A can produce more of product X but also more of product Y:
{{anchor name="Comparative advantage: example 2" h3="Comparative advantage: example 2"}}
{{anchor name="Increasing productivity" h3="Increasing productivity"}}
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Absolute advantage
Imagine there are two persons A and B who produce product X and Y. One is faster at producing product X and one is faster at producing product Y. Assume these are their productivities for a day's labor, if they produced either product X or product Y:
Comparative advantage: example 1
In this situation, person A can produce more of product X but also more of product Y:
Comparative advantage: example 2
Increasing productivity

Revision [102]

Edited on 2009-11-15 18:47:42 by WikiNielsio
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The oldest known version of this page was created on 2009-11-15 18:46:59 by WikiNielsio
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