agenda graph making review globalization, trade, and protectionism notes pass out progress reports...
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Agenda• Graph Making• Review• Globalization, Trade,
and Protectionism Notes
• Pass out Progress Reports
• Progress Reports are due by Wednesday
Line Bar
• Globalization• Opportunity Cost• Absolute Advantage• Comparative Advantage
• Answer: Comparative Advantage• Comparative advantage is the basis for all trade
between individuals, regions, and nations.
• Name for the process of increasing the connectivity and interdependence of the worlds markets and businesses
• “Shrinking the world” through sharing of information, ideas
• Made Possible through TV and Internet!
• Exists when a person/Country can produce more of a certain good/service than someone else in the same amount of time or can produce a good using the least amount of resources.
• Post Example:
• Student 1: Is the best artist and has the best handwriting• Student 2: Has decent handwriting but is a terrible artist.
• Should Student 1 do the whole project?
• A person or a nation has a comparative advantage in the production of a product when it can produce the product at a lower domestic opportunity cost than can a trading partner.
• Ex: You are in a group and making a poster. • Student 1: Has great handwriting and is an ok artist• Student 2: Is a good artist but has terrible handwriting.
• Which student should do which job?
BakeCakes
MakePizza
Ms. Cranston
2 cakes/hr.(1c = 3p)
6 pizzas/hr.(1p = 1/3c)
Mr.Neanover
4 cakes/hr.(1c = 2p)
8 pizzas/hr.(1p = 1/2c)
Mr. Neanover should specialize and trade if he has acomparative advantage (lower opportunity cost)in the production of one of the products.
Mr. Neanover has a lower opportunity cost in producing cakes; therefore, he should specialize in the production of cakes. Ms. Cranston has a lower opportunity cost in producing pizza; therefore, she should specialize in the production of pizza.
Interior of the Car
Exterior of the Car
Opportunity Cost:
• Two or more people, companies, or countries that become dependent(need) on each other.
BakeCakes
Pinson will specialize in cakes.
Make Pizza Gray will specialize in pizzas.
Ms. Moody 1c = 3pFor one cake, Moody would be willing to pay anything up to 3 pizzas.
1p = 1/3cFor one pizza, Moody will want more than 1/3 cakes.
Mr. Neanover
1c = 2pFor one cake, Neanover will want more than 2 pizzas.
1p = 1/2cFor one pizza, Neanover would be willing to pay anything up to ½ cake.
Imports• Goods and services
purchased from other countries
• If exports=imports then there is a balance of trade
Exports• Goods and services
sold to other countries
• More imports than exports= trade deficit
• More exports than imports= trade surplus
• The price of one country’s currency expressed in another country’s currency.
• Broken into buying and selling rate
• $1= .69 British Pounds
• $1= 15.18 Mexican Pesos
• $1= .95 Euros
• $1= 120.41 Japanese Yen
• $1= 6.21 Chinese Yuan
• Attempting to shield the economy from changes brought by trade
• The government contributing money to make the price lower.• Example: 1 Bushel of Corn = $70
• Government pays the farmer $40
• Consumers can buy corn now for $30
• Sanctions- Government restricting trade or investment in a country
• Embargo• Whatis it?
• A Maximum and/or aminimum amount of
something