Journal entry questions are related to the application of the key concepts you learn to the real-world economic issues. The questions contain key economic principles and ideas related to the Macroeconomics topics you are learning. Please feel free to express your perspectives and state how the economic principles and ideas affect your economic decision making process.
Title your Journal entry: Unit 2 Journal
and comparative advantages differ in both meaning and importance. An
individual or a country may have absolute advantages in producing
several products and services whereas others may have comparative
advantages. Give an example in which one person has absolute advantages
in doing two things but another person has a comparative advantage in
doing one of the tasks. Will both individuals benefit if they specialize
in a task based on their comparative advantage and engage in trade?
The circular flow diagram shows us how economic agents interact in various markets once the economic decisions (choices) are made. As an economic agent, in which market do you participate in the circular flow diagram? How does the flow diagram help you understand the roles of the economic agents in the market?