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2 “Copyright and Terms of Service” Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Copyright © Texas Education Agency, All Rights Reserved.

3 SWBAT (Student Will Be Able To) Explain the advantages of specialization. Identify the concept of comparative advantage. Distinguish between portfolio investment and direct investment. Copyright © Texas Education Agency, All Rights Reserved.

4 Specialization Comparative Advantage Absolute Advantage Portfolio Investment Direct Investment Copyright © Texas Education Agency, All Rights Reserved.

5 Comparative Advantage, Absolute Advantage, and Specialization explained. Copyright © Texas Education Agency, All Rights Reserved.

6 What did Adam Smith do? What did he believe? What did David Ricardo do? What did he believe? Do you side more with Adam Smith’s theory or David Ricardo’s theory? What are some advantages to specialization? What is the main advantage to specialization? Adam Smith David Ricardo Copyright © Texas Education Agency, All Rights Reserved.

7 Foreign Direct Investment and Foreign Portfolio Investment explained. Copyright © Texas Education Agency, All Rights Reserved.

8 Based on the information in the article and the chart, which type of investment would you make? Based on your answer to the first question, why would you make that choice? Copyright © Texas Education Agency, All Rights Reserved.

9 Can you explain the advantages of specialization? Can you identify the concept of comparative advantage? Can you make distinctions between an FDI (foreign direct investment) and an FPI (foreign portfolio investment)? Copyright © Texas Education Agency, All Rights Reserved.

10 Specialization Does the USA specialize in any goods/services? If yes, what? If you/your family comes from another country, does your home country specialize in any goods/services? If yes, what country and what are the goods/services? Comparative Advantage vs. Absolute Advantage Create a Venn diagram comparing and contrasting comparative advantage vs. absolute advantage. FDI and FPI Use the following website, GyXO to find an article that addresses either an FDI, and FPI, or both and do an article review. GyXO Copyright © Texas Education Agency, All Rights Reserved.

11 Formal Assessment Rubric Copyright © Texas Education Agency, All Rights Reserved.