00:01
So here we're talking about two countries, right? we have france.
00:05
We have austria.
00:07
And we have two commodities, glass and rye.
00:13
I'm going to call these r and g, right? so we're told about the opportunity costs directly here.
00:23
That's kind of useful.
00:24
So the cost of france of 1g is equal to 5r.
00:30
While austria's opportunity cost of one g is equal to 10r, right? what does that mean? well, it means that france has comparative advantage in glass because it has the smaller opportunity cost, right? so the pattern of trade here is that france is going to sell glass to austria, right? so what do we need know here, right? france needs greater than equal to 5r per glass, right? whenever france produces a piece of glass, it's giving up 5 rye.
01:14
So it won't sell the glass unless it's getting more than 5 rye.
01:21
Austria will pay less than or equal to 10 rye, right, per glass...