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International Economics

International Economics. Lesson 3: Comparative Advantage, Part 2. Take Out Your “Stranded” Activity. Comparative Advantage. Remember, Babe had a higher opportunity cost of pitching than the other pitchers. What did it cost Babe, when he pitched? What opportunity did he give up?.

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International Economics

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  1. International Economics Lesson 3: Comparative Advantage, Part 2

  2. Take Out Your “Stranded” Activity

  3. Comparative Advantage

  4. Remember, Babe had a higher opportunity cost of pitching than the other pitchers What did it cost Babe, when he pitched? What opportunity did he give up?

  5. Comparative Advantage When you have a lower opportunity cost of doing something.

  6. On Your Scramble/Sudoku Activity • Label preferred production points. • Complete fill in the “production totals” blanks. • Calculate each person’s opportunity cost of each good.

  7. On your “Stranded” activity: • Record which person has the comparative advantage in each good. • Identify which person should specialize in which activity. • Label these new production points on the PPFs. • Record the new total production amounts for each good.

  8. 1. Which country has the lowest opportunity cost in the production of computers? • A) Kenya • B) USA

  9. 2. Which country has the comparative advantage in the production of computers? • A) Kenya • B) USA

  10. 3. Which country should only make wheat? • A) Kenya • B) USA

  11. A) Knuckle B) Brawny 4. Who has a comparative advantage in pitching? Pitching Knuckle Brawny Hitting

  12. A) Knuckle B) Brawny 5. Who has a lower opportunity cost of hitting? Pitching Knuckle Brawny Hitting

  13. A) Mexico B) Kazakhstan 6. Who has a comparative advantage in making nacho cheese? Tortilla Chips Mexico Kazakhstan Nacho Cheese

  14. Max they can produce of each good Stereos Bling Rio 50 50 Morocco 20 40 7. Who has a comparative advantage in stereos, and who has a comparative advantage in bling? • A) Rio -Both • B) Morocco -Both • C) Rio, Morocco • D) Morocco, Rio

  15. Chore Time!

  16. Northland & Southland • Max Northland can produce of each: • 100 tons food OR 100 tons clothes • Max Southland can produce of each: • 400 tons food OR 200 tons clothes

  17. Refer Back to Your Plane/Jumble Activity • With your partner, determine production levels for each of you, for each good, that are beneficial to both of you. • Remember “total” specialization may not be feasible if one partner is much batter at both activities. • Record your work and results.

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