Comparative Advantage. Should trade be promoted?

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Presentation transcript:

Comparative Advantage

Should trade be promoted?

Why do many believe in Protectionism?

Comparative Advantage Key Terms International Trade (Open Economy) Exports and Imports The PPC Graph Opportunity Costs Absolute Advantage Comparative Advantage Specialization

US Trade Balance

The PPC Connection

Who has the absolute advantage in producing chairs? HDTVs?

Calculating Comparative Advantage

Specialization and the World Market

Former AP Questions 2003 Form B # # Form B # #3 /exam/exam_information/index.html Click On Macroeconomics and the FRQs are on the bottom of the page. /exam/exam_information/index.html