**Globalization Modules**

Time: 40 minutes

Skills: Holistic Thinking

Objective 2

Related Resources:

- Global Trade Lesson 2.pptx.

- Mankiw, N.G. (2008). Interdependence and the Gains from Trade. *Principles of Microeconomics,* 5^{th} Edition, South-Western Cengage Learning.

Present the PowerPoint presentation. Use the glossary to define any unknown terms

Discussion Questions:

- Why do we choose to be interdependent?
- What are the driving forces behind trade?
- If one person is good at producing every good, then how can we determine specialization?

Activity 1.

Scenario: Kim works 4 hours a day. He takes 30 minutes to make a book and 60 minutes to make a pen. Draw Kim’s PPF (production possibilities frontier). Find the OC (Opportunity cost ) of book and pen for Kim.

Activity 2.

1. Country A takes 40 minutes to make a car, and 30 minutes to make a computer. Country B takes 48 minutes to make a car, and 40 minutes to make a computer. Total work time is 4 hours for both. Draw PPFA and PPFB in one diagram having car in the X-axis. Show the numbers and labels.

What is the OC_{CAR} for Country A? b) What is the OC_{CAR} for Country B? Express in number, not in fraction. c) Is there any possibility of trade? If so, which country will export car?