2.6 Notes- Free Trade and Comparative Advantage

​Take notes on these slides today

Multiple Choice

Which economist is most closely associated with the idea of free trade, and what is one benefit of free trade according to the slide?

• Adam Smith; Free trade lowers prices for consumers.

• John Maynard Keynes; Free trade increases government revenue.

• Karl Marx; Free trade eliminates competition.

• David Ricardo; Free trade reduces job opportunities.

Open Ended

Why do you think free trade is important in today's global economy?

Multiple Choice

Which of the following statements about comparative advantage is correct?

• A country has a comparative advantage if it can produce a good at a lower opportunity cost than another country.

• A country has a comparative advantage if it can produce more of a good overall than another country.

• Comparative advantage does not consider opportunity cost.

• Comparative advantage means producing all goods more efficiently than others.

Open Ended

Explain the difference between comparative advantage and absolute advantage using an example from the slides.

Multiple Choice

Which of the following best describes the concept of opportunity cost in international trade?

• The total cost of producing goods in a country

• The value of the next best alternative foregone when making a trade decision

• The amount of money exchanged between countries

• The difference between imports and exports

Multiple Choice

Based on the production possibilities frontier, what is the opportunity cost of moving from point B to point C on the graph?

• 1 truck and 1 car

• 1 truck and 2 cars

• 1 truck and 3 cars

• 1 truck and 4 cars

Open Ended

How does free trade contribute to global economic interdependence?

Open Ended

What questions do you still have about free trade and comparative advantage after today's lesson?

Match

EXIT TICKET: Match the following

• an economic problem of humans having limited resources while

  also having unlimited needs and wants

• a social science

  that studies how people, acting individually and in groups, decide to use

  scarce resources to satisfy their wants.

• Behind each choice, there is an alternative choice that could have

  been made. The value of that second-best option.

• rewards or penalties that influence an individual to make or avoid a specific choice.

Scarcity

Economics

Opportunity Cost

Incentives

• Scarcity

• Economics

• Opportunity Cost

• Incentives