Week 2 · Readings & resources

Week 2 — Readings & Resources

Principles of Microeconomics Free sample edition

Your primary reading is Chapter 2 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 67–84 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more depth, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (20–24 min total)

① Faster or cheaper? Absolute versus comparative advantage

Chapter 2, Section “Find the lower cost: comparative advantage” · Session 1, Segment 2, “Comparative advantage from the cost table” · Remember: absolute advantage asks who makes more, and comparative advantage asks who gives up less.

Comparative and Absolute Advantage Explained: Economic Concepts Explained — Think Econ — a whiteboard walk-through with two people on an island making clothes and food: one is faster at both, and the video builds each person's opportunity cost by dividing what is given up by what is gained. It shows that each person's two costs are reciprocals and that no one can hold the comparative advantage in both goods, the same checks the chapter makes at the food stand. This builds on Week 1's opportunity cost, the value of the best alternative given up. (video, 7 min) (captions: creator)
The Global Economy: It's a Small World After All — Page One Economics, Federal Reserve Bank of St. Louis — a short explainer that starts at the breakfast table and then works a copper example in which one country has the absolute advantage in wire while the other makes pipe at a lower opportunity cost. Read the sections on why people trade, how they know what to trade, and how trade and comparative advantage are related; skip the section on how much the country trades, which is about the whole economy and belongs to a macro course. (reading, 8–12 min)

② Why the faster partner still trades: Smith, Ricardo, and specialization

Chapter 2, Section “Specialization: why the faster partner still trades” · Session 1, Segment 3, “Specialization, Smith, and Ricardo” · Remember: a producer better at everything still gains by specializing where its opportunity cost is lowest.

Specialization and Trade: Crash Course Economics #2 — CrashCourse — two hosts move from Adam Smith's division of labor, shown in a pizza kitchen, to an invented two-country example with planes and shoes in which one country has the absolute advantage in both goods and the two still gain by trading at a rate between their opportunity costs. Use it while working through the Week-2 module overview. Its opening remarks about history and its closing claims about which countries grew are the video's own; the course presents the trade-policy debate without a verdict. (video, 9 min) (captions: creator)
Draw Me The Economy: What is comparative advantage? — Dessine-moi l'éco — a three-minute drawn explainer of Ricardo's England and Portugal example, with the workers each country needs for a piece of cloth and a barrel of wine. It compares the size of each country's productivity gap; the chapter's method compares opportunity costs, which gives the same answer here. Its framing of Ricardo's theory as a case for free trade is the video's own. (video, 3 min) (captions: automatic)
On Foreign Trade, from On the Principles of Political Economy and Taxation — Econlib — the original 1817 text, posted in full. Scroll to the passage where England needs 100 workers for cloth and 120 for wine while Portugal needs 90 and 80, and read only those few paragraphs; the rest of the chapter on money and prices goes beyond this course. (reading, 5–10 min)

③ The price of the swap and the proof of the gains

Chapter 2, Section “Prove the gains with a before-and-after table” · Session 2, Segment 5, “The before-and-after table” · Remember: at a rate between the two opportunity costs, both partners end with more of both goods from the same hours.

Comparative Advantage: Determining the Range of Prices at which Trade can Occur — Economics in Many Lessons — two short worked problems that set the terms of trade between the two producers' opportunity costs: wheat traded for rice at a rate between 5 and 15 bushels, then grapes for strawberries read off two straight-line frontiers, with a trade inside each range leaving both sides better off. The countries' numbers are the video's own, not real data; check each rate against the chapter's range of 1 to 2 smoothies per sandwich. (video, 5 min) (captions: automatic)
Is Free Trade Always Better? Comparative Advantage Explained — Stick Science — a stick-figure island story in which one islander is faster at both chopping logs and gathering food; the two specialize, swap at a rate between their opportunity costs, and both end with more of both. It closes on steel workers who lose their jobs when imports arrive, the adjustment cost the chapter names. Its "always better" verdict is the video's own; the course leaves that judgment to you. (video, 5 min) (captions: creator)

④ The trade debate: gains for many, costs for some

Chapter 2, Section “Trade policy: keep the positive apart from the normative” · Session 2, Segment 6, “The trade-policy debate” · Remember: specialization raising total output is a positive result, and how to weigh adjustment costs is a normative question.

Trade Adjustment Assistance for Workers: Background and Current Status — Congressional Research Service — a nonpartisan report on a federal program for workers who lose their jobs to foreign competition. Read the Background section and its Program Rationale, which sets the benefits of lower trade barriers for consumers and exporters beside the concentrated costs for workers who face new competition; the later sections on funding and legislative history go beyond this week. (reading, 8–12 min)
International Trade 101: Economics Explained — Federal Reserve Bank of St. Louis — an explainer on who gains and who loses when a country opens to trade in coffee: buyers pay less, while domestic sellers sell less and some workers lose jobs, and it ends by describing a tariff and the economists' case against one; that closing argument is one side of a debate the chapter presents from both sides. Stop before its supply-and-demand graph if you want to stay within this week; next week takes up demand, and the surplus areas it shades come later in the course. (video, 9 min) (captions: creator)

Optional one-stop reference (free online reference)

Comparative Advantage — Concise Encyclopedia of Economics, Econlib — a signed encyclopedia entry with two islanders who make bananas and fish, worked from even time-splitting to specialization and a trade that leaves both better off; read the main entry and skip the further-reading list and related links. (reading, 8–12 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

Provenance: Built with The Course Maker · samples.thecoursemaker.com