1 / 14

Opportunity Cost Review

Opportunity Cost Review. Take 2 minutes: What does “there is no such thing as a free lunch mean” to you?. Opportunity Cost Review. Opportunity Cost: the next best alternative Trade-off: Any alternative that must be given up. NMHS Menu. Nachos Peanut Butter and Jelly Sandwich

hadar
Download Presentation

Opportunity Cost Review

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Opportunity Cost Review • Take 2 minutes: What does “there is no such thing as a free lunch mean” to you?

  2. Opportunity Cost Review • Opportunity Cost: the next best alternative • Trade-off: Any alternative that must be given up

  3. NMHS Menu • Nachos • Peanut Butter and Jelly Sandwich • Chicken Fingers • Caesar salad • Ham and cheese sandwich • Rank your choice from 1-5 • What was your opportunity cost? • What was your trade-off?

  4. Opportunity Cost Review • What does there is no such thing as a free lunch mean to…. • Georgia? • Other Competing States?

  5. Notes –Comparative v. Absolute • SSEIN1a- Define and compare absolute and comparative advantage • SSEIN1b-Explain that most trade takes place b/c of comparative advantage

  6. What is trade? • Trade is the voluntary exchange of goods and services.

  7. Voluntary Exchange • People only exchange goods and services when it benefits them OR marginal benefits outweigh marginal costs • When costs are greater than the benefits people stop trading Both parties gain!

  8. Exports and Imports • Export: Goods that a nation sells to other countries • Import: goods that a nation buys from other nations • Net Exports: (x-m) Exports-imports

  9. Types of advantages Comparative Advantage Absolute advantage • Producing a good because you have a lower opportunity cost. • You can produce a good with fewer resources than another country. • This means you can produce more goods and services more efficiently than another country.

  10. Comparative Advantage • Comparative advantage allows countries to specialize. • It is what we use to decide who should produce products and who they should trade with.

  11. Benefits of Trade When countries specialize and trade it leads to an increase in the supply and variety of goods and services available to consumers.

  12. Balance of Trade • It is the difference between the exchange of exports and imports for acountry • Exports - Imports= Balance of Trade Unfavorable Balance Imports > Exports Favorable balance Exports > Imports

  13. Balance of Payments • Balance of Payments: the difference between money a country pays for exports receives for imports • In other words, it is a record of all transactions that occur because of trade.

  14. Trade Values • Trade Deficit (negative trade balance): occurs when a country pays more for imports that it makes on exports • Trade Surplus (positive trade balance): occurs when a country earn more on exports than it pays for imports

More Related