Working Paper

Teaching and Learning Alternatives to a Comparative Advantage Motivation for Trade

James K. Self, William E. Becker
CESifo, Munich

CESifo Working Paper No. 5238

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.

CESifo Category
Economics of Education
Trade Policy
Empirical and Theoretical Methods
Keywords: comparative advantage, specialization, trade, introductory economics textbooks
JEL Classification: A200