Trade Lesson 2 PowerPoint Presentation
Trade Lesson 2 PowerPoint Presentation

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, 5th 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 OCCAR for Country A? b) What is the OCCAR for Country B?  Express in number, not in fraction.  c) Is there any possibility of trade? If so, which country will export car?

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