Specialization Trade 1 Specialization What is it Producing

Specialization & Trade

1. Specialization. What is it? ► Producing a few types of goods and services instead of producing a wide variety of goods and services

2. Examples of specialization ►Japan – electronics, automobiles ►Argentina – agricultural products (crops) ►Iceland – catching fish

3. Why people specialize? ►A person might enjoy producing a particular good or service ►A person may have a special talent or skill in producing a particular good or service

3. Why countries specialize? ►Geography, such as kinds of natural resources or type of terrain ►Climate, such as weather patterns ►Education and skill level of human resources ►High levels of capital resources (ex. tools, machines)

4. Interdependence. What is it? ► Depending on other individuals or countries to provide goods and services you want and, in turn, providing goods and services others want ► EX: a sick person goes to the doctor who has the knowledge and skill to help the person get well; the doctor depends on other people to provide the goods/services she needs (ex. car repair, groceries) ► Same is true for countries – U. S. depends on Brazil for coffee & shoes; Brazil depends on the U. S. for computer equipment & chemicals

5. Definitions EXPORTS: goods or services sold to other countries ► IMPORTS: goods and services purchased from other countries ► TARIFF: a tax placed on imports ► QUOTA: a limit on the number of imports that may enter a country ►

6. What type of work would you specialize in? ► Mr. Daly – specializes in teaching § § § Bachelors, Masters & Specialist degree History courses Teaching § WHAT WOULD YOU LIKE TO SPECIALIZE IN? § WHAT EDUCATION/COURSES WILL YOU NEED?

Why do countries trade? Countries trade because they expect to benefit from the trade ► Each exchanges something they value less for something they value more ► Both are better off after the trade (assuming each side has accurate info) ► Ex. U. S. trades chemicals with China in exchange for clothing. ►

TRADE BARRIERS ► These are government policies which place restrictions on international trade. Trade barriers can either make trade more difficult and expensive (tariff barriers) or prevent trade completely (e. g. trade embargo)

Why are there trade barriers? May help protect American jobs ►May make us less dependent on foreign countries ►

TRADING GAME ► FIVE § § § NATIONS GROUP A - United Kingdom GROUP B - China GROUP C - Colombia GROUP D - Saudi Arabia GROUP E - Ghana

TRADING GAME ► Gold— 5 points per unit ► Oil— 4 points per unit ► Lumber— 3 points per unit ► Electronics— 2 points per unit ► Coffee— 1 point per unit

THE RULES ► The objective is for each student to get the most points by trading their country’s goods for products from another country ► The game allows for “free trade, ” meaning any country can trade with another country, and any item and/or amount of product can be traded for another. ► You can creatively market your products or combine products to end up with something more desirable.

ROUND 1 – Free Trade – 10 min ► Gold— 5 points per unit ► Oil— 4 points per unit ► Lumber— 3 points per unit ► Electronics— 2 points per unit ► Coffee— 1 point per unit

STOP!!! HOW MANY POINTS DO YOU HAVE?

WORLD SITUATION: The world is running out of oil, making oil extremely rare and much more expensive. OUTCOME: The worth of oil increases by two points. ► Gold— 5 points per unit ► Oil— 6 points per unit ► Lumber— 3 points per unit ► Electronics— 2 points per unit ► Coffee— 1 point per unit

ROUND 2 – THREE MINUTES TO TRADE ► Gold— 5 points per unit ► Oil— 6 points per unit ► Lumber— 3 points per unit ► Electronics— 2 points per unit ► Coffee— 1 point per unit

STOP!!! HOW MANY POINTS DO YOU HAVE?

WORLD SITUATION: Ghana learns to make counterfeit electronics, making its electronics cheaper. Meanwhile, fires in the Pacific North West and demand from China cause lumber supply to drop and price to rise. OUTCOME: Ghana takes one electronic unit from each country. Lumber increases by two points. ► Gold— 5 points per unit ► Oil— 8 points per unit ► Lumber— 5 points per unit ► Electronics— 2 points per unit ► Coffee— 1 point per unit

Who has the most points?

Who has the most points? ► Did any countries end the game richer or poorer than they started? Which ones? ► What was it like to be a rich country? A poor country? ► Was it easy or difficult to trade? Why? ► Did any countries feel especially powerful or powerless? ► Which items were most popular? Which were least popular? Why?