EC 252 (WI22): Chapter 8 by Erica Orians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p Chapter 8 en-us 2022-02-01 15:53:41 UTC 2025-11-19 20:05:17 UTC hello@padlet.com Chapter 8: Gains from Trade ericaorians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2023639944 2022-02-01 15:53:41 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2023639944 Instructions: View instructions on the section padlet. ericaorians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2023639946 2022-02-01 15:53:41 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2023639946 Team: Students will do one chapter per section. View your assigned padlet at this link. ericaorians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2023639947 2022-02-01 15:53:41 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2023639947 Why do we have price tags? ericaorians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2041337234 2022-02-10 23:22:46 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2041337234 Important Terms rebeccawisniewski1 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043817031 You have an absolute advantage in producing a product if you can produce the product using the fewest inputs.
You have a comparative advantage if you can complete a task at a lower opportunity cost than anyone else.
A prediction market is one in which payoffs are based on occurrence of uncertain events. 
Specialization, which is focusing on specific tasks, will increase output when it is based on comparative advantage
A knowledge problem exists when all the information needed to make a good decision is not available.
Internal markets are organized within a company to buy and sell scarce resources, often not using real money. These are used to solve a knowledge problem, allocate resources of a company more efficiently, and make better predictions.
]]> 2022-02-12 15:58:15 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043817031 Price madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043840026 is a signal, an incentive, and a bundle of information.]]> 2022-02-12 16:23:18 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043840026 Prediction Markets rebeccawisniewski1 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043899039 I never heard of predictions markets before. This explains how they can be used to hedge risk. ]]> 2022-02-12 17:19:46 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043899039 Comparative Advantage rebeccawisniewski1 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043906061 I like the way this shows how to calculate opportunity cost.]]> 2022-02-12 17:29:31 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2043906061 A simple pencil ericaorians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044111928 A great example of essential trade. ]]> 2022-02-12 23:37:01 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044111928 Super Bowl! ericaorians https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044113176

]]> 2022-02-12 23:40:34 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044113176 Gains from trade madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044772655 The benefits that come from reallocating resources, goods, and services to better uses.]]> 2022-02-13 17:41:02 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044772655 madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044778937 Managers can use internal markets to solve
knowledge problems, improve forecasts, and
allocate scarce resources.]]> 2022-02-13 17:47:07 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2044778937 Chapter 8 Summary ryannuth https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046706836 In this chapter it goes over how reallocation of resources leads into gains from trades. Because of this it opens up specializations of goods/services that are produced. Prices are indicators in this section that help predict whether a certain good/services are about to skyrocket and gives buyers incentives to consume more or less. As well as the type of formed markets help access the resources and use knowledge problem to better understand certain situations. ]]> 2022-02-14 16:52:20 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046706836 Another Example of Comparative Advantage ryannuth https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046718607 2022-02-14 16:57:06 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046718607 ryannuth https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046767579 Comparative advantage gives insight on how to better put your strengths and weaknesses while accessing the opportunity cost of each abilities. ]]> 2022-02-14 17:17:45 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046767579 Absolute Advantage guntherdickson https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046922877 An absolute advantage tells you whose best at a task. In this example the USA has an absolute advantage in software production and China had an absolute advantage in producing manufactured goods.]]> 2022-02-14 18:24:05 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046922877 Price Signal example guntherdickson https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046928452 When the price of a good goes up meaning its valued higher suppliers are signaled to produce more.]]> 2022-02-14 18:26:29 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2046928452 Gains from Trade Due to Comparative Advantage madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047226827 2022-02-14 21:02:28 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047226827 Internal Prediction Market madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047231339 example:  managers at Ford need accurate forecasts of the number of each type of car they’ll sell each week. Traditionally they relied on forecasts put together by their internal analysts. But when Ford set up a prediction market and allowed its employees to bet on the outcome, the market yielded forecasts that were 25% more accurate.]]> 2022-02-14 21:05:30 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047231339 Chapter glance madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047232930 2022-02-14 21:06:40 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047232930 What markets do madisonmoran3 https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047250175 They reallocate stuff like resources, goods, and services to better uses, generating gains from trade.]]> 2022-02-14 21:20:25 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047250175 Markets & Pickles Podcast kayleighoverley https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047612873 This was one of the podcast options a few weeks ago for our discussion posts! I noticed a few subjects mentioned in the podcast that were also mentioned in this chapter. I really enjoyed listening to this and think it is a great tool to understand the concepts discussed in this chapter!]]> 2022-02-15 02:38:38 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047612873 Comparative Advantage Vs Absolute Advantage LoganJRussell https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047632734 good video for deeper understanding ]]> 2022-02-15 02:53:36 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047632734 Explaining Market Forces LoganJRussell https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047642393 If you are struggling to understand market forces this video does a great job of explaining how they work]]> 2022-02-15 03:00:55 UTC https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047642393 Key Concepts LoganJRussell https://padlet.com/ericaorians/xq6qz50gtqkjqw7p/wish/2047652369
  • absolute advantage: the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group.
  • comparative advantage: the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.
  • gains from trade:  gains from trade are the net benefits to economic agents from being allowed an increase in voluntary trading with each other.
  • internal markets: a system in which goods and services are sold by the provider to a range of purchasers within the same organization, who compete to establish the price of the product.
  • prediction market: A prediction market is a market where people can trade contracts that pay based on the outcomes of unknown future events. The market prices generated from these contracts can be understood as a kind of collective prediction among market participants.
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