PPT-Absolute and Comparative Advantage

Absolute and Comparative Advantage AP Macroeconomics Coach Saucedo Manvel High School They want goods Think of what we would do without if we didnt trade To make money Nations trade for several reasons. 978 978 915 915 978 Input Torque Capacity lbft 14502050 2250 14501650 14501650 14501650 14501650 15501750 1650 15501750 15501750 Engine Coupling Dry Clutch Dry Clutch Dry Clutch Dry Clutch Dry Clutch Dry Clutch Dry Clutch Dry Clutch Dry Clutch Dry C A2 Economics. Aims and Objectives. Aim: . Understand the theory of absolute and comparative advantage.. Objectives: . • Define the theory of absolute . and comparative . advantage. .. Analyse the effects of specialisation. Men, women, and time needed. . My wife is good at ironing while I am good at changing tires. To iron 1 shirt. To change one tire. women. 6. 20. men. 10. 15. Minutes needed to produce. What does this graph immediately tell you? . EQ: How do we gain from trade?. What was the most important. document written in 1776?. written by. Adam Smith. The Father of Economics. The Wealth of Nations. He is my great, great, great, great, . Terms of Trade. Graph the Following PPCs. Shirts. (millions). Wheat. (millions. of bushels). China. 25. 50. USA. 50. 200. Values represent all resources spent on one good. (the other value is 0). Which country has an absolute advantage in shirts?. The economic resources nations have to produce goods and services are scarce. Decision-makers face trade-offs as the result of scarcity. . The model of the production possibilities frontier is used to analyze the opportunity costs and trade-offs that individuals, firms, or countries face. . Everyone does best when each person (or each country) concentrates on the activities for which his or her . opportunity cost . is lowest.. Principle of Comparative . Advantage. 117$. 140$. Absolute . Corn. Wheat. 5. 6. 6. 9. Because the PPF gradients are different, these two countries have different opportunity costs between Corn and Wheat . they will trade!. **Opportunity cost = sacrifice/gain. Imagine that you are the manager of a fast-food restaurant. You are outgoing, interact well with customers, and work the cash register proficiently. You are also efficient in the kitchen and can manage several tasks at once, such as making pizzas, preparing salads, and filling drinks. . The comparative can sometimes feel like a hard topic to tackle because you’ve never had a question like this before. . But try not to be . daunted! . Introduction to Comparative. Comparative simply means . Solving Absolute Value . Inequalities. Situation. The Frito-Lay plant has strict standards when it comes to bagging their products. The weight of the chips in a snack-size bag must be within 0.15 ounces of the advertised size of 1.75 ounces in order to be sent to the store shelf. . Comparative Advantage and Trade Barriers. Disclaimer: The views expressed are those of the presenters and do not necessarily reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System.. How do we determine what to produce?. Absolute Advantage. Absolute advantage is when someone is the best at doing something. The USA is the best at producing entertainment. Nick . Saban. is the best at coaching college football. family, never to attempt to make at home . what will cost him more to make than to . buy. The tailor does not attempt to make . his own shoes, but buys them of the . shoemaker. The shoemaker does not .