Comp advantage graphs and applications
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The document discusses concepts related to international trade including absolute advantage, comparative advantage, and the benefits of trade. It provides examples comparing the production of sugar and bananas in Cuba and Honduras. Cuba has an absolute advantage in sugar production while Honduras has a comparative advantage. There are also discussions around developed vs emerging markets in production and examples of how comparative advantage applies to individual choices like cleaning houses.
Comp advantage graphs and applications
- 1. Trade opener What is good about living along the US/Mexico border? Where was your shirt made? (Have your neighbor check) http://www.flashworldmap.com/ Today: Mankiw Chapter 3
- 3. On the production possibilities frontier shown, which point or points are NOT possible for this economy to produce? a.A, B, C, D b.E and F c.E only d.F only On the production possibilities frontier shown, which point or points are efficient? a.A, B, C, D b.B and C c.E and F d.F only
- 5. Absolute Advantage • Total hours to finish jobs
- 7. Specialization of labor • Firms & countries figure out more efficient methods of production • Effect on concept of trade?
- 8. Honduras • 100 tons of sugar/year OR • 100 tons of bananas • PPF
- 9. Cuba • 600 tons of sugar/year OR • 200 tons of bananas
- 10. Cuba & Honduras • Scarcity of farm land • Who has absolute advantage? • Who has the comparative advantage of trade? • Why is this better? Cuba: 600 tons of sugar/year OR 200 tons of bananas Honduras: 100 tons of sugar/year OR 100 tons of bananas
- 11. Developed vs. Emerging markets Make a shirt in the USA: Land Labor Capital Make a shirt in Honduras: Land Labor Capital
- 12. Developed vs. Emerging markets Design smartphone in the USA: Land Labor Capital Design smartphone in Honduras: Land Labor Capital
- 13. Another way of looking at Comparative Advantage • Should Jason Terry clean his own house?
- 14. Another way of looking at Comparative Advantage • Should Lebron James clean his house?
- 15. Another way of looking at Comparative Advantage • Walmart sells everything? • Vs • Specialty shops
- 17. GATE Economics Principle #1: People Choose, based on preferences • Your Choice: • AP Econ Workbook Assignment • Write 2-3 paragraph to Raul Grijalva explain the concepts of absolute advantage, comparative advantage and the benefits of further expansion of NAFTA into South America • 5pts extra if I watch you e-send it