Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/108783 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5238
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Introductory economics courses emphasize opportunity cost, comparative advantage and specialization to show the benefits of trade. We assert that this emphasize leads to erroneous student mindset that trade requires specialization based on comparative advantage. We test students who have been exposed to the typical textbook and classroom presentation of specialization and trade with real but paradoxical situations where the same goods are both imported and exported by a country. Students are found to generally understand comparative advantage calculations but wrongfully apply the idea to this multiproduct trade situation for which specialization is not relevant.
Subjects: 
comparative advantage
specialization
trade
introductory economics textbooks
JEL: 
A20
Document Type: 
Working Paper
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