PPT-Absolute and Comparative Advantage

A2 Economics Aims and Objectives Aim Understand the theory of absolute and comparative advantage Objectives Define the theory of absolute and comparative advantage Analyse the effects of specialisation. International Trade:. Comparative Advantage and Trade Barriers. Disclaimer: The views expressed are those of the presenters and do not necessarily reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System.. License Agreement for Use of Electronic Resources. The illustrations and photographs in this PowerPoint are protected by copyright. Permission to use these materials is strictly limited to educational purposes associated with the course for which you have adopted . The economic resources nations have to produce goods and services are scarce. Decision-makers face trade-offs as the result of scarcity. . The model of the production possibilities frontier is used to analyze the opportunity costs and trade-offs that individuals, firms, or countries face. . OBJECTIVE: SWBAT analyze the benefits of trade.. DO NOW: Why do you think it is important for industrialized countries like the United States of America to trade?. Consider your typical day:. You wake up to an alarm clock made in Korea.. Everyone does best when each person (or each country) concentrates on the activities for which his or her . opportunity cost . is lowest.. Principle of Comparative . Advantage. 117$. 140$. Absolute . Solving Absolute Value . Inequalities. Situation. The Frito-Lay plant has strict standards when it comes to bagging their products. The weight of the chips in a snack-size bag must be within 0.15 ounces of the advertised size of 1.75 ounces in order to be sent to the store shelf. . Unit 1. AP Micro. Stater. It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. Adam Smith, . The Wealth of Nations. (1776). Absolute and relative white cells count Absolute value (leukocytes/mm 3 = Total leukocyte count ( cells/mm 3 X Relative value(%) Example: Total leukocyte count = 6000 Segmented forms (relative no.) = 50 % Module 4-”Comparative Advantage and Trade” By. J.A.SACCO Absolute and Comparative Advantage Countries/Individuals trade to maximize production- specialization is the KEY! Absolute Advantage- One nation can produce more output with the same quantity of inputs (factors of production) as the other. Absolute and Comparative Advantage AP Macroeconomics Coach Saucedo Manvel High School They want goods Think of what we would do without if we didn’t trade. To make money. Nations trade for several reasons Absolute Advantage. given . the exact same resources, country A can produce more of a good than country . B. Comparative Advantage. given the same resources, country B produces good X at a lower opportunity cost.   . . Lecture 3: Comparative Advantage Benjamin Graham. Today’s Plan. Housekeeping. Reading Quiz. How trade creates wealth. Arthur has no comparative advantage.. Ben should do both tasks because he has an absolute advantage in both.. Arthur has a comparative advantage in shearing sheep and Ben has a comparative advantage in milking goats.. An Inquiry in the Nature and Causes of the Wealth of Nations (. 1776). “It is a maxim of every prudent mast of a family, never to attempt to make at home what will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes but employs a tailor.”.