Submit Search
Upload
interdependence and the gains from trade
ā¢
Download as PPT, PDF
ā¢
20 likes
ā¢
14,558 views
itmamul akwan
Follow
Business
Technology
Slideshow view
Report
Share
Slideshow view
Report
Share
1 of 34
Download now
Recommended
Thinking Like an Economist
Thinking Like an Economist
Chris Thomas
Ā
Supply, Demand, and Government Policies
Supply, Demand, and Government Policies
Chris Thomas
Ā
Consumers, Producers, and the Efficiency of Markets
Consumers, Producers, and the Efficiency of Markets
Chris Thomas
Ā
Thinking Like An Economist_Chapter 2_By G. Mankew
Thinking Like An Economist_Chapter 2_By G. Mankew
djalex035
Ā
The Theory of Consumer Choice
The Theory of Consumer Choice
Chris Thomas
Ā
market forces of supply and demand
market forces of supply and demand
itmamul akwan
Ā
Application:International Trade
Application:International Trade
Tuul Tuul
Ā
consumers, producers, and the effeciency of markets
consumers, producers, and the effeciency of markets
itmamul akwan
Ā
Recommended
Thinking Like an Economist
Thinking Like an Economist
Chris Thomas
Ā
Supply, Demand, and Government Policies
Supply, Demand, and Government Policies
Chris Thomas
Ā
Consumers, Producers, and the Efficiency of Markets
Consumers, Producers, and the Efficiency of Markets
Chris Thomas
Ā
Thinking Like An Economist_Chapter 2_By G. Mankew
Thinking Like An Economist_Chapter 2_By G. Mankew
djalex035
Ā
The Theory of Consumer Choice
The Theory of Consumer Choice
Chris Thomas
Ā
market forces of supply and demand
market forces of supply and demand
itmamul akwan
Ā
Application:International Trade
Application:International Trade
Tuul Tuul
Ā
consumers, producers, and the effeciency of markets
consumers, producers, and the effeciency of markets
itmamul akwan
Ā
Ten Principles of Economics
Ten Principles of Economics
Chris Thomas
Ā
Thinking Like an Economist
Thinking Like an Economist
Tuul Tuul
Ā
Elasticity and Its Application
Elasticity and Its Application
Chris Thomas
Ā
thinking like an economist
thinking like an economist
itmamul akwan
Ā
The Markets for the Factors of Production
The Markets for the Factors of Production
Chris Thomas
Ā
supply,demand, and government policies
supply,demand, and government policies
itmamul akwan
Ā
Firms in Competitive Markets
Firms in Competitive Markets
Chris Thomas
Ā
Interdependence and the Gains from Trade
Interdependence and the Gains from Trade
Tuul Tuul
Ā
Production and Growth
Production and Growth
Chris Thomas
Ā
The Market Forces of Supply and Demand
The Market Forces of Supply and Demand
Tuul Tuul
Ā
Principles of economics (Chapter 2)
Principles of economics (Chapter 2)
Yowela Estanislao
Ā
The Market Forces of Supply and Demand
The Market Forces of Supply and Demand
Chris Thomas
Ā
Chapter 15
Chapter 15
sdugfvna
Ā
Ten Principles of Economics - Micro & Macro Economics
Ten Principles of Economics - Micro & Macro Economics
FaHaD .H. NooR
Ā
Oligopoly
Oligopoly
Chris Thomas
Ā
Measuring a Nation's Income
Measuring a Nation's Income
Chris Thomas
Ā
Aggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply
Chris Thomas
Ā
Chapter 07 Consumers, Producers And The Efficiency Of Market
Chapter 07 Consumers, Producers And The Efficiency Of Market
sira78
Ā
Chapter 13
Chapter 13
sdugfvna
Ā
Macro Economics_Chapter 7_Consumers,Producers and Efficiency Market
Macro Economics_Chapter 7_Consumers,Producers and Efficiency Market
djalex035
Ā
Lecture 3
Lecture 3
Amin Hanif
Ā
The market forces of supply and demand
The market forces of supply and demand
Mubashar Islam
Ā
More Related Content
What's hot
Ten Principles of Economics
Ten Principles of Economics
Chris Thomas
Ā
Thinking Like an Economist
Thinking Like an Economist
Tuul Tuul
Ā
Elasticity and Its Application
Elasticity and Its Application
Chris Thomas
Ā
thinking like an economist
thinking like an economist
itmamul akwan
Ā
The Markets for the Factors of Production
The Markets for the Factors of Production
Chris Thomas
Ā
supply,demand, and government policies
supply,demand, and government policies
itmamul akwan
Ā
Firms in Competitive Markets
Firms in Competitive Markets
Chris Thomas
Ā
Interdependence and the Gains from Trade
Interdependence and the Gains from Trade
Tuul Tuul
Ā
Production and Growth
Production and Growth
Chris Thomas
Ā
The Market Forces of Supply and Demand
The Market Forces of Supply and Demand
Tuul Tuul
Ā
Principles of economics (Chapter 2)
Principles of economics (Chapter 2)
Yowela Estanislao
Ā
The Market Forces of Supply and Demand
The Market Forces of Supply and Demand
Chris Thomas
Ā
Chapter 15
Chapter 15
sdugfvna
Ā
Ten Principles of Economics - Micro & Macro Economics
Ten Principles of Economics - Micro & Macro Economics
FaHaD .H. NooR
Ā
Oligopoly
Oligopoly
Chris Thomas
Ā
Measuring a Nation's Income
Measuring a Nation's Income
Chris Thomas
Ā
Aggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply
Chris Thomas
Ā
Chapter 07 Consumers, Producers And The Efficiency Of Market
Chapter 07 Consumers, Producers And The Efficiency Of Market
sira78
Ā
Chapter 13
Chapter 13
sdugfvna
Ā
Macro Economics_Chapter 7_Consumers,Producers and Efficiency Market
Macro Economics_Chapter 7_Consumers,Producers and Efficiency Market
djalex035
Ā
What's hot
(20)
Ten Principles of Economics
Ten Principles of Economics
Ā
Thinking Like an Economist
Thinking Like an Economist
Ā
Elasticity and Its Application
Elasticity and Its Application
Ā
thinking like an economist
thinking like an economist
Ā
The Markets for the Factors of Production
The Markets for the Factors of Production
Ā
supply,demand, and government policies
supply,demand, and government policies
Ā
Firms in Competitive Markets
Firms in Competitive Markets
Ā
Interdependence and the Gains from Trade
Interdependence and the Gains from Trade
Ā
Production and Growth
Production and Growth
Ā
The Market Forces of Supply and Demand
The Market Forces of Supply and Demand
Ā
Principles of economics (Chapter 2)
Principles of economics (Chapter 2)
Ā
The Market Forces of Supply and Demand
The Market Forces of Supply and Demand
Ā
Chapter 15
Chapter 15
Ā
Ten Principles of Economics - Micro & Macro Economics
Ten Principles of Economics - Micro & Macro Economics
Ā
Oligopoly
Oligopoly
Ā
Measuring a Nation's Income
Measuring a Nation's Income
Ā
Aggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply
Ā
Chapter 07 Consumers, Producers And The Efficiency Of Market
Chapter 07 Consumers, Producers And The Efficiency Of Market
Ā
Chapter 13
Chapter 13
Ā
Macro Economics_Chapter 7_Consumers,Producers and Efficiency Market
Macro Economics_Chapter 7_Consumers,Producers and Efficiency Market
Ā
Viewers also liked
Lecture 3
Lecture 3
Amin Hanif
Ā
The market forces of supply and demand
The market forces of supply and demand
Mubashar Islam
Ā
Principles of economics (Chapter 1)
Principles of economics (Chapter 1)
Yowela Estanislao
Ā
the cost of taxation
the cost of taxation
itmamul akwan
Ā
monetary system
monetary system
itmamul akwan
Ā
measuring cost of living
measuring cost of living
itmamul akwan
Ā
elasticity and its application
elasticity and its application
itmamul akwan
Ā
Genel Eko. Chapter1
Genel Eko. Chapter1
sdasasd
Ā
Supply, Demand & Government Policies
Supply, Demand & Government Policies
CASE
Ā
Gains from trade
Gains from trade
Abhishek Gupta
Ā
The Gains from International Trade
The Gains from International Trade
Higher Education Department, Haryana
Ā
measuring nation's income
measuring nation's income
itmamul akwan
Ā
International Trade
International Trade
tutor2u
Ā
Ten Principles Of Economics
Ten Principles Of Economics
Mohan Raj Venu
Ā
Ch03
Ch03
Jim Lee
Ā
Ch04
Ch04
Jim Lee
Ā
ten principles of economics
ten principles of economics
itmamul akwan
Ā
Trading Partners Interdependence
Trading Partners Interdependence
Jasmeet Singh
Ā
Trade
Trade
nida_71
Ā
F.y.b.a. economics - eng (rev)
F.y.b.a. economics - eng (rev)
i134747
Ā
Viewers also liked
(20)
Lecture 3
Lecture 3
Ā
The market forces of supply and demand
The market forces of supply and demand
Ā
Principles of economics (Chapter 1)
Principles of economics (Chapter 1)
Ā
the cost of taxation
the cost of taxation
Ā
monetary system
monetary system
Ā
measuring cost of living
measuring cost of living
Ā
elasticity and its application
elasticity and its application
Ā
Genel Eko. Chapter1
Genel Eko. Chapter1
Ā
Supply, Demand & Government Policies
Supply, Demand & Government Policies
Ā
Gains from trade
Gains from trade
Ā
The Gains from International Trade
The Gains from International Trade
Ā
measuring nation's income
measuring nation's income
Ā
International Trade
International Trade
Ā
Ten Principles Of Economics
Ten Principles Of Economics
Ā
Ch03
Ch03
Ā
Ch04
Ch04
Ā
ten principles of economics
ten principles of economics
Ā
Trading Partners Interdependence
Trading Partners Interdependence
Ā
Trade
Trade
Ā
F.y.b.a. economics - eng (rev)
F.y.b.a. economics - eng (rev)
Ā
Similar to interdependence and the gains from trade
03-interdependence-131108090121-phpapp02.pptx
03-interdependence-131108090121-phpapp02.pptx
sadiqfarhan2
Ā
03-interdependence-131108090121-phpapp02.pptx
03-interdependence-131108090121-phpapp02.pptx
sadiqfarhan2
Ā
interdependence.ppt
interdependence.ppt
ASVKVinayak
Ā
Interdependence and the Gains from Trade
Interdependence and the Gains from Trade
Chris Thomas
Ā
03_4E - Interdependence and the Gains From Trade.ppt
03_4E - Interdependence and the Gains From Trade.ppt
SajidIqbalLibrary
Ā
03_4E - Interdependence and the Gains From Trade.ppt
03_4E - Interdependence and the Gains From Trade.ppt
Ray Carlos Junior Vega Lugo
Ā
03_4E - Interdependence and the Gains From Trade (1).ppt
03_4E - Interdependence and the Gains From Trade (1).ppt
CharlesAdams73
Ā
3
3
Max Scott
Ā
3
3
Max Scott
Ā
03_4E - Interdependence and the Gains From Trade - Part 1 of 2.ppt
03_4E - Interdependence and the Gains From Trade - Part 1 of 2.ppt
SajidIqbalLibrary
Ā
03_4E - Interdependence and the Gains From Trade - Part 2 of 2.ppt
03_4E - Interdependence and the Gains From Trade - Part 2 of 2.ppt
SajidIqbalLibrary
Ā
Internatioanal Trade
Internatioanal Trade
harshadagawali1
Ā
International Trade hs
International Trade hs
Donna Miller
Ā
Mba 1 me u 1.1 introduction
Mba 1 me u 1.1 introduction
Rai University
Ā
Mba 1 me u 1.1 introduction
Mba 1 me u 1.1 introduction
Bhavik Panchal
Ā
Oligopoly
Oligopoly
Adi Rezpector
Ā
Oligopoly
Oligopoly
Rossan Niraula
Ā
chapter two.pptx
chapter two.pptx
sadiqfarhan2
Ā
Etp econ lecture note 3
Etp econ lecture note 3
Community living, Mothercare school, Radhakrishna Enterprise, Sterling hospital, Esskay finance
Ā
Chapter 3.pdf
Chapter 3.pdf
SmartWorld13
Ā
Similar to interdependence and the gains from trade
(20)
03-interdependence-131108090121-phpapp02.pptx
03-interdependence-131108090121-phpapp02.pptx
Ā
03-interdependence-131108090121-phpapp02.pptx
03-interdependence-131108090121-phpapp02.pptx
Ā
interdependence.ppt
interdependence.ppt
Ā
Interdependence and the Gains from Trade
Interdependence and the Gains from Trade
Ā
03_4E - Interdependence and the Gains From Trade.ppt
03_4E - Interdependence and the Gains From Trade.ppt
Ā
03_4E - Interdependence and the Gains From Trade.ppt
03_4E - Interdependence and the Gains From Trade.ppt
Ā
03_4E - Interdependence and the Gains From Trade (1).ppt
03_4E - Interdependence and the Gains From Trade (1).ppt
Ā
3
3
Ā
3
3
Ā
03_4E - Interdependence and the Gains From Trade - Part 1 of 2.ppt
03_4E - Interdependence and the Gains From Trade - Part 1 of 2.ppt
Ā
03_4E - Interdependence and the Gains From Trade - Part 2 of 2.ppt
03_4E - Interdependence and the Gains From Trade - Part 2 of 2.ppt
Ā
Internatioanal Trade
Internatioanal Trade
Ā
International Trade hs
International Trade hs
Ā
Mba 1 me u 1.1 introduction
Mba 1 me u 1.1 introduction
Ā
Mba 1 me u 1.1 introduction
Mba 1 me u 1.1 introduction
Ā
Oligopoly
Oligopoly
Ā
Oligopoly
Oligopoly
Ā
chapter two.pptx
chapter two.pptx
Ā
Etp econ lecture note 3
Etp econ lecture note 3
Ā
Chapter 3.pdf
Chapter 3.pdf
Ā
More from itmamul akwan
basic tools of finance
basic tools of finance
itmamul akwan
Ā
saving and investment
saving and investment
itmamul akwan
Ā
applications intenational trade
applications intenational trade
itmamul akwan
Ā
islamic faith ( aqidah islam )
islamic faith ( aqidah islam )
itmamul akwan
Ā
How islamic are islamic countries ?
How islamic are islamic countries ?
itmamul akwan
Ā
Matematika dalam Sholat
Matematika dalam Sholat
itmamul akwan
Ā
Motivasi dari 4 batang lilin
Motivasi dari 4 batang lilin
itmamul akwan
Ā
More from itmamul akwan
(7)
basic tools of finance
basic tools of finance
Ā
saving and investment
saving and investment
Ā
applications intenational trade
applications intenational trade
Ā
islamic faith ( aqidah islam )
islamic faith ( aqidah islam )
Ā
How islamic are islamic countries ?
How islamic are islamic countries ?
Ā
Matematika dalam Sholat
Matematika dalam Sholat
Ā
Motivasi dari 4 batang lilin
Motivasi dari 4 batang lilin
Ā
Recently uploaded
Call Girls Hebbal Just Call š 7737669865 š Top Class Call Girl Service Bangalore
Call Girls Hebbal Just Call š 7737669865 š Top Class Call Girl Service Bangalore
amitlee9823
Ā
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
Eric T. Tung
Ā
Uneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration Presentation
uneakwhite
Ā
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon investment
Ā
Call Girls in Delhi, Escort Service Available 24x7 in Delhi 959961-/-3876
Call Girls in Delhi, Escort Service Available 24x7 in Delhi 959961-/-3876
dlhescort
Ā
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Adnet Communications
Ā
Call Girls From Raj Nagar Extension Ghaziabadā¤ļø8448577510 ā¹Best Escorts Servi...
Call Girls From Raj Nagar Extension Ghaziabadā¤ļø8448577510 ā¹Best Escorts Servi...
lizamodels9
Ā
Malegaon Call Girls Service ā ļø82500ā77686 āļø Enjoy 24/7 EscortĀ Service
Malegaon Call Girls Service ā ļø82500ā77686 āļø Enjoy 24/7 EscortĀ Service
Damini Dixit
Ā
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
Abortion pills in Kuwait Cytotec pills in Kuwait
Ā
Business Model Canvas (BMC)- A new venture concept
Business Model Canvas (BMC)- A new venture concept
P&CO
Ā
Nelamangala Call Girls: š 7737669865 š High Profile Model Escorts | Bangalore...
Nelamangala Call Girls: š 7737669865 š High Profile Model Escorts | Bangalore...
amitlee9823
Ā
BAGALUR CALL GIRL IN 98274*61493 ā¤CALL GIRLS IN ESCORT SERVICEā¤CALL GIRL
BAGALUR CALL GIRL IN 98274*61493 ā¤CALL GIRLS IN ESCORT SERVICEā¤CALL GIRL
kapoorjyoti4444
Ā
Falcon Invoice Discounting platform in india
Falcon Invoice Discounting platform in india
Falcon Invoice Discounting
Ā
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
daisycvs
Ā
(Anamika) VIP Call Girls Napur Call Now 8617697112 Napur Escorts 24x7
(Anamika) VIP Call Girls Napur Call Now 8617697112 Napur Escorts 24x7
Call Girls in Nagpur High Profile Call Girls
Ā
Call Girls In Nangloi Rly Metro ź§ā¦ā¦.95996 ā¦ 13876 Enjoy ź§Escort
Call Girls In Nangloi Rly Metro ź§ā¦ā¦.95996 ā¦ 13876 Enjoy ź§Escort
dlhescort
Ā
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
IndeedSEO
Ā
Cracking the Cultural Competence Code.pptx
Cracking the Cultural Competence Code.pptx
Workforce Group
Ā
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting
Ā
Phases of Negotiation .pptx
Phases of Negotiation .pptx
nandhinijagan9867
Ā
Recently uploaded
(20)
Call Girls Hebbal Just Call š 7737669865 š Top Class Call Girl Service Bangalore
Call Girls Hebbal Just Call š 7737669865 š Top Class Call Girl Service Bangalore
Ā
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
Ā
Uneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration Presentation
Ā
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
Ā
Call Girls in Delhi, Escort Service Available 24x7 in Delhi 959961-/-3876
Call Girls in Delhi, Escort Service Available 24x7 in Delhi 959961-/-3876
Ā
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Ā
Call Girls From Raj Nagar Extension Ghaziabadā¤ļø8448577510 ā¹Best Escorts Servi...
Call Girls From Raj Nagar Extension Ghaziabadā¤ļø8448577510 ā¹Best Escorts Servi...
Ā
Malegaon Call Girls Service ā ļø82500ā77686 āļø Enjoy 24/7 EscortĀ Service
Malegaon Call Girls Service ā ļø82500ā77686 āļø Enjoy 24/7 EscortĀ Service
Ā
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
Ā
Business Model Canvas (BMC)- A new venture concept
Business Model Canvas (BMC)- A new venture concept
Ā
Nelamangala Call Girls: š 7737669865 š High Profile Model Escorts | Bangalore...
Nelamangala Call Girls: š 7737669865 š High Profile Model Escorts | Bangalore...
Ā
BAGALUR CALL GIRL IN 98274*61493 ā¤CALL GIRLS IN ESCORT SERVICEā¤CALL GIRL
BAGALUR CALL GIRL IN 98274*61493 ā¤CALL GIRLS IN ESCORT SERVICEā¤CALL GIRL
Ā
Falcon Invoice Discounting platform in india
Falcon Invoice Discounting platform in india
Ā
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
Ā
(Anamika) VIP Call Girls Napur Call Now 8617697112 Napur Escorts 24x7
(Anamika) VIP Call Girls Napur Call Now 8617697112 Napur Escorts 24x7
Ā
Call Girls In Nangloi Rly Metro ź§ā¦ā¦.95996 ā¦ 13876 Enjoy ź§Escort
Call Girls In Nangloi Rly Metro ź§ā¦ā¦.95996 ā¦ 13876 Enjoy ź§Escort
Ā
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
Ā
Cracking the Cultural Competence Code.pptx
Cracking the Cultural Competence Code.pptx
Ā
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting: The best investment platform in india for investors
Ā
Phases of Negotiation .pptx
Phases of Negotiation .pptx
Ā
interdependence and the gains from trade
1.
Interdependence and the Gains
from Trade Itās about how our economy coordinates the activities of millions of people with varying tastes and abilities. Copyright Ā© 2004 South-Western/Thomson Learning 3
2.
Consider your typical
day ā¢ You wake up to an alarm clock made in Korea. ā¢ Then, you pour yourself orange juice made from Florida oranges and coffee from beans grown in Brazil. ā¢ Over breakfast, you watch a news program broadcast from New York on your television made in Japan. ā¢ Then, you put on some clothes made of cotton grown in Georgia and sewn in factories in Thailand. ā¢ You drive to class in a car made of parts manufactured in a halfdozen different countries. ā¢ Then, you arrived at your collage then start learning with Macroeconomics book by N. Gregory Mankiw which is published in United States of America. Copyright Ā© 2004 South-Western
3.
Do you realize? Every
day you rely on many people from around the world, most of whom you donāt know to provide you with goods and services that you enjoy. Well, it is what we called as interdependence. Such interdependence is possible because people trade with one another. Copyright Ā© 2004 South-Western
4.
Interdependence and the
Gains from Trade ā¢ Remember, economics is the study of how societies produce and distribute goods in an attempt to satisfy the wants and needs of its members. Copyright Ā© 2004 South-Western
5.
Interdependence and the
Gains from Trade ā¢ How do we satisfy our wants and needs in a global economy? ā¢ We can be economically self-sufficient. ā¢ We can specialize and trade with others, leading to economic interdependence. Copyright Ā© 2004 South-Western
6.
Interdependence and the
Gains from Trade ā¢ Individuals and nations rely on specialized production and exchange as a way to address problems caused by scarcity. ā¢ But this gives rise to two questions: ā¢ Why is interdependence the norm? ā¢ What determines production and trade? Copyright Ā© 2004 South-Western
7.
Interdependence and the
Gains from Trade ā¢ Why is interdependence the norm? ā¢ Interdependence occurs because people are better off when they specialize and trade with others. ā¢ What determines the pattern of production and trade? ā¢ Patterns of production and trade are based upon differences in opportunity costs. Copyright Ā© 2004 South-Western
8.
A PARABLE FOR
THE MODERN ECONOMY ā¢ Imagine . . . ā¢ only two goods: potatoes and meat ā¢ only two people: a potato farmer and a cattle rancher What should each produce? Why should they trade? Copyright Ā© 2004 South-Western
9.
Table 1 The
Production Opportunities of the Farmer and Rancher Copyright Ā© 2004 South-Western
10.
Production Possibilities Self-Sufficiency means ignoring
each other; ā¢ Each consumes what they each produce. ā¢ The production possibilities frontier is also the consumption possibilities frontier. ā¢ Without trade, economic gains are diminished. Copyright Ā© 2004 South-Western
11.
Figure 1 The
Production Possibilities Curve (a) The Farmerā s Production Possibilities Frontier Meat (ounces) If there is no trade, the farmer chooses this production and consumption. 8 4 0 A 16 32 Potatoes (ounces) CopyrightĀ©2003 Southwestern/Thomson Learning
12.
Figure 1 The
Production Possibilities Curve (b) The Rancher ās Production Possibilities Frontier Meat (ounces) 24 If there is no trade, the rancher chooses this production and consumption. 12 0 B 24 48 Potatoes (ounces) CopyrightĀ©2003 Southwestern/Thomson Learning
13.
Specialization and Trade ā¢
The Farmer and the Rancher Specialize and Trade ā¢ Each would be better off if they specialized in producing the product they are more suited to produce, and then trade with each other. The farmer should produce potatoes. The rancher should produce meat. Copyright Ā© 2004 South-Western
14.
Table 2 The
Gains from Trade: A Summary Copyright Ā© 2004 South-Western
15.
Figure 2 How
Trade Expands the Set of Consumption Opportunities (a) The Farmerā s Production and Consumption Meat (ounces) 8 Farmer's consumption with trade A* 5 4 Farmer's production and consumption without trade A Farmer's production with trade 0 32 16 Potatoes (ounces) 17 CopyrightĀ©2003 Southwestern/Thomson Learning
16.
Figure 2 How
Trade Expands the Set of Consumption Opportunities (b) The Rancherās Production and Consumption Meat (ounces) Rancher's production with trade 24 Rancher's consumption with trade 18 13 B* B 12 0 12 24 27 Rancher's production and consumption without trade 48 Potatoes (ounces) Copyright Ā© 2004 South-Western
17.
Table 2 The
Gains from Trade: A Summary Copyright Ā© 2004 South-Western
18.
THE PRINCIPLE OF COMPARATIVE
ADVANTAGE ā¢ Differences in the costs of production determine the following: ā¢ Who should produce what? ā¢ How much should be traded for each product? Who can produce potatoes at a lower cost--the farmer or the rancher? Copyright Ā© 2004 South-Western
19.
THE PRINCIPLE OF COMPARATIVE
ADVANTAGE ā¢ Differences in Costs of Production ā¢ Two ways to measure differences in costs of production: ā¢ The number of hours required to produce a unit of output (for example, one pound of potatoes). ā¢ The opportunity cost of sacrificing one good for another. Copyright Ā© 2004 South-Western
20.
Absolute Advantage ā¢ The
comparison among producers of a good according to their productivityā absolute advantage ā¢ Describes the productivity of one person, firm, or nation compared to that of another. ā¢ The producer that requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good. Copyright Ā© 2004 South-Western
21.
Absolute Advantage ā¢ The
Rancher needs only 10 minutes to produce an ounce of potatoes, whereas the Farmer needs 15 minutes. ā¢ The Rancher needs only 20 minutes to produce an ounce of meat, whereas the Farmer needs 60 minutes. The Rancher has an absolute advantage in the production of both meat and potatoes. Copyright Ā© 2004 South-Western
22.
Opportunity Cost and
Comparative Advantage ā¢ Compares producers of a good according to their opportunity cost. ā¢ Whatever must be given up to obtain some item ā¢ The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good. Copyright Ā© 2004 South-Western
23.
Comparative Advantage and
Trade ā¢ Who has the absolute advantage? ā¢ The farmer or the rancher? ā¢ Who has the comparative advantage? ā¢ The farmer or the rancher? Copyright Ā© 2004 South-Western
24.
Table 3 The
Opportunity Cost of Meat and Potatoes Opportunity Cost of: 1 oz of Meat 1 oz of Potatoes Farmer 4 oz potatoes 1/4 oz meat Rancher 2 oz potatoes 1/2 oz meat Copyright Ā© 2004 South-Western
25.
Comparative Advantage and
Trade ā¢ The Rancherās opportunity cost of an ounce of potatoes is Ā¼ an ounce of meat, whereas the Farmerās opportunity cost of an ounce of potatoes is Ā½ an ounce of meat. ā¢ The Rancherās opportunity cost of a pound of meat is only 4 ounces of potatoes, while the Farmerās opportunity cost of an ounce of meat is only 2 ounces of potatoes... Copyright Ā© 2004 South-Western
26.
Comparative Advantage and
Trade ā¦so, the Rancher has a comparative advantage in the production of meat but the Farmer has a comparative advantage in the production of potatoes. Copyright Ā© 2004 South-Western
27.
Comparative Advantage and
Trade ā¢ Comparative advantage and differences in opportunity costs are the basis for specialized production and trade. ā¢ Whenever potential trading parties have differences in opportunity costs, they can each benefit from trade. Copyright Ā© 2004 South-Western
28.
Comparative Advantage and
Trade ā¢ Benefits of Trade ā¢ Trade can benefit everyone in a society because it allows people to specialize in activities in which they have a comparative advantage. Copyright Ā© 2004 South-Western
29.
FYIāThe Legacy of
Adam Smith and David Ricardo ā¢ Adam Smith ā¢ In his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith performed a detailed analysis of trade and economic interdependence, which economists still adhere to today. ā¢ David Ricardo ā¢ In his 1816 book Principles of Political Economy and Taxation, David Ricardo developed the principle of comparative advantage as we know it today. Copyright Ā© 2004 South-Western
30.
APPLICATIONS OF COMPARATIVE ADVANTAGE ā¢
Should Tiger Woods Mow His Own Lawn? ? ? ? Copyright Ā© 2004 South-Western
31.
APPLICATIONS OF COMPARATIVE ADVANTAGE ā¢
Should the United States Trade with Other Countries? ā¢ Each country has many citizens with different interests. International trade can make some individuals worse off, even as it makes the country as a whole better off. ā¢ Importsāgoods produced abroad and sold domestically ā¢ Exportsāgoods produced domestically and sold abroad Copyright Ā© 2004 South-Western
32.
Summary ā¢ Each person
consumes goods and services produced by many other people both in our country and around the world. ā¢ Interdependence and trade are desirable because they allow everyone to enjoy a greater quantity and variety of goods and services. Copyright Ā© 2004 South-Western
33.
Summary ā¢ There are
two ways to compare the ability of two people producing a good. ā¢ The person who can produce a good with a smaller quantity of inputs has an absolute advantage. ā¢ The person with a smaller opportunity cost has a comparative advantage. Copyright Ā© 2004 South-Western
34.
Summary ā¢ The gains
from trade are based on comparative advantage, not absolute advantage. ā¢ Trade makes everyone better off because it allows people to specialize in those activities in which they have a comparative advantage. ā¢ The principle of comparative advantage applies to countries as well as people. Copyright Ā© 2004 South-Western
Download now