Gain from Trade

Gain from Trade

When parties expect to gain, they trade voluntarily.

Imagine your family owns an apple orchard. Apples are one of your family's fruit... but they also really like peaches.

​​Apples

Your friend's family owns a peach orchard. Like yours, they like peaches... but they also really like apples.

​​Peaches

Multiple Choice

Is there an opportunity for both families to gain?

• Yes, because they can trade SOME of the apples for SOME of the peaches.

• Yes, because they can trade ALL of the apples for ALL of the peaches.

• No, because each family likes their own fruits.

• No, because each family does not like the others' fruits.

When people, societies, or countries trade, both parties who are trading expect to get something extra in return for what they are offering.

Countries often trade their SURPLUS goods and services in exchange for ones they do not have or that are too expensive for them to make.

​

Multiple Choice

Based on the previous slide, what does "surplus," mean?

• An equal distribution of resources
• An amount left over when requirements have been met; an excess of production or supply over demand.
• A shortage of production or supply
• A deficit in demand

Multiple Choice

Georgia is know to have a climate that supports the growth of apples AND peaches. It does NOT favor growing oranges or pineapples. To satisfy customers wanting oranges and pineapples, what can apple and peach farmers do to meet demand?

• Trade their surplus apples and peaches for oranges and pineapples.

• Try to have a small grove for oranges and pineapples to sell what survives.

• Trade ALL of their apples and peaches for pineapples and oranges.

• Nothing, because oranges and pineapples do not grow well in Georgia.

Multiple Choice

How does having different types of fruits for sale benefit Georgia farmers?

• Diversifying product offerings, attracting a wider range of customers, reducing dependency on a single crop, and potentially increasing revenue.
• Focusing solely on a single crop to maximize profits
• Ignoring customer preferences and demands
• Selling only one type of fruit to limit competition

Open Ended

Think of an example in YOUR life where trading can be beneficial.