Act I · Building the Stage · Module 02

The Port of Marginal Falls

Comparative advantage, specialization, and trade

17 slides · Hubbard & O'Brien, chapter 9.

The story

Where this fits in Marginal Falls

The port opens, and the town must decide what to make and what to obtain through exchange. Comparing opportunity costs shows why a town can gain from trade even when its trading partner is more productive at making every good.

A question to take into class

If another town can produce both goods using fewer resources, can Marginal Falls still benefit from trading with it?

Lecture slides

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From the slides to the classroom

Activities used in this module

Comparative advantage and trade

Port Ledger Game

Explore production choices and exchange at the port alongside the comparative-advantage module.

Open activity

Activities open at marginalfalls.com. Students join using the room code supplied by their instructor.