Trade – What’s it good for? Absolutely everything! Mr. Burdette – Economics MHS

The Renaissance Man (or Woman) What does it mean to be a Renaissance man? Or woman? Why could this lead to being impoverished?

Story of Birkhaman Birkhaman was a poor Nepalese man He was a butcher, furniture maker, roofer, construction worker and professional cook He was still very poor How could this be?

Specialization and Interdependence Adam Smith – Wealth of Nations Division of Labor Encourages massive city centers

Economic Interdependence With specialization and trade, we depend on other people or countries to produce goods and services Think about your lunch that you will eat today, how is this an example of economic interdependence?

Voluntary Exchange Two parties are free to trade Both parties incur a cost to gain a benefit What is the issue with a barter economy?

Coerced Trade What is the difference between a big business and a big government?

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Barter Economy Barter economy requires a coincidence of wants and therefore is extremely inefficient. What comes out of the difficulties of the barter economy?

MONEY! Because of the Coincidence of Wants – Money is created to make trade easier

How does trade make us wealthier? Trade moves goods to people who value them Trade increases the quantity and variety of goods available Trade lowers the cost of goods Trade creates more winners than losers – Creative Destruction

Not a “zero-sum” Game! There are few “losers” in Economics Trade is truly voluntary (voluntary exchange) Who decides what to buy?