Economics Feb 26

Tuesday, 02/26/13-Econ




Appetizer: Why do countries and people trade with each other?



Download International Economics-warm up for trade



Download International Trade-phinizy



Activity with trading: You will receive a bag with a letter on it. On your notebook paper write round 1, 2, 3, 4.



You and only you will look in YOUR bag and rate what is in it based on a 5 (best), 4, 3, 2, 1(being the worst) on the line that says round 1.



Next, you will be allowed to trade with like countries (As with As, Bs with Bs, etc.). You can trade or not-it is up to you. On your paper, you will rate round 2, next As and Cs, Bs and Ds will trade-rate this trade as round 3, and finally you can trade with any country: A, B, C, or D



Please do not destroy your bag; I need them for my other classes!



Main Course:



International Table of Contents: #2



What is comparative and absolute advantage?



Review notes why people trade: Now you have had an activity with trading, so you should know what motivates trade with each other or countries

Power Point-Absolute and comparative advantage









Shoes





Phones



United States





80





160



Brazil





60





20



Which nation has an absolute advantage in making shoes? (Look at the chart!)



Now which nation has a comparative advantage in making shoes? Here is how you figure this out! (It is all about who can produce using the least amount of resources since resources are s____!)



Now pay attention!



To make one pair of shoes the U.S. gives up 2 phones



80/80=1 shoe for U.S. 160/80=2 phones



To make one pair of shoes Brazil has to give up __ phones



60/60=1 shoe for Brazil; 20/60=1/3 phone



Who is giving up the least amount of resources?



Trade Barriers: You will do this on lineless paper

Ticket out the Door: What did you learn from your trading activity? Why did you make your trades?

Page 88-1-7 answers only!