Principles of Macroeconomics / Unit 17 MAC 1605 short lesson, about 20 seconds
The Reciprocal Rule
Captions available
The idea
The opportunity cost of one good is the reciprocal of the other's. If one cloth costs two grain, one grain costs half a cloth. So no country holds the comparative advantage in both goods.
In practice
In Southland one cloth costs one grain, so one grain costs one cloth.
Where people slip
State cost and slope consistently; the anchor slips between them.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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