Todays Warm Up Answer on your warm upexit

Today’s Warm Up �Answer on your warm up/exit ticket sheet: �Should the U. S. trade with people and businesses in other countries, or would it be better for people in the U. S. to make everything they consume for themselves?

Round 1 – Step 1 �Take one card, but don’t show your card to others in the group! �Assess how happy you are with the item on your card; on the piece of paper provided, rank your satisfaction on a scale of 1 (lowest/worst) to 5 (highest/best)

Round 1 – Step 2 �Now you may show others in your group what g/s you have and may trade if you would like �Rate the items you have now, after trading or not, using the scale from 1 to 5 again

Round 1 - Recap �How many of you were happier after trading?

Round 2 – Step 1 �You may trade with any of the students in the class �Visual 2 will show you what items are available in other groups – you are not required to trade!

Round 2 – Step 2 �Rate the items you have now, after trading or not, using the scale from 1 to 5 again

Round 2 – Recap �Did more people trade in Round 1 or Round 2? �Why did this occur? �Were you required to trade? �Did anyone have a higher rating in Round 1 or 2 without trading? If so, how could this happen?

Recap Cont’d… �The number of items to trade remained the same in each round, but overall people seemed to be happier with the items they had at the end of Round 2 than at the end of Round 1. How could this be?

Today’s Exit Ticket �Answer on your warm up/exit ticket sheet: �Based on the Trade Game, would you revise your answer to the warm up? Why or why not? �In case you forgot the question… Should the U. S. trade with people and businesses in other countries, or would it be better for people in the U. S. to make everything they consume for themselves?

Today’s Warm Up �Answer on your warm up/exit ticket sheet: �Excluding yesterday’s trade game, when is the last time you traded something? Why did you trade?

Today’s LEQ: Why do people specialize and trade? Why Trade?

Why Trade? �Trade is the voluntary exchange of g/s �When expected gains outweigh expected costs, people trade Benefits > Costs �When countries specialize in what they can produce at the lowest cost then trade with others, both production and consumption increase

Comparative Advantage �Comparative Advantage = fundamental reason to trade �Countries specialize in production of g/s that can be produced at lower opportunity cost than a trade partner would have to pay to produce the same g/s Opportunity cost = highest valued alternative that is given up when a choice is made �Pizza Shop Activity

Absolute Advantage �Absolute Advantage = when a worker in one country can produce more of a good than a worker in another country Cell Phone / Microwave Activity Part 1 Country A had the absolute advantage in producing both cell phones and microwaves – Should they bother trading with Country B? If so, what should they focus on producing? Cell Phone / Microwave Activity Part 1

Main Ideas… �People voluntary exchange g/s because they expect to be better off after the exchange �Voluntary exchange among different countries gives broader range of choices in buying g/s �Like trade among ind'ls within one country, int’l trade promotes specialization and division of labor and increases output and consumption �Ind’ls and nations have a comparative advantage in the production of g/s if they can produce a product at a lower opp. Cost than other ind’ls/nations

Today’s Exit Ticket �Answer on your warm up/exit ticket sheet: What is the major difference between comparative advantage and absolute advantage? Which is most important when deciding what a country should produce versus trade?