Specialization and Trade

What is trade?

• Giving something to someone for free

• Giving something to someone and getting something else back

• Not giving something to someone and asking them to give you something

• Not doing anything at all

Which of these is NOT an example of trade?

• Sharing part of my cookies with someone and getting some of their crackers in return

• Giving apples to Florida in exchange for oranges

• Giving away my car for free

• Trading money in order to get my hair cut

What is specialization?

• When one state makes all different types of products

• When one state gives apples to another state

• When one state focuses on producing certain products they are good at

• When states make nothing at all

What is NOT an example of specialization?

• California producing all types of products

• Michigan producing a lot of cars

• Florida producing a lot of oranges

• Michigan producing a lot of apples

Why do states specialize?

• So they can produce so many new products every year?

• So they don't have to produce everything and can trade for it.