2. + Comparative Advantage and Terms of Trade Analysis Students will identify individual and international motivation to trade and explicitly assess data to draw conclusions in relation to comparative advantage and terms of trade. (IR-1 & C-4) Homework: Macro Packet Activity 4.7 Unit 8 Quiz Tuesday (10 MC & 2 FRQ)

3. + Comparative Advantage Experiment Objective: To ensure the well-being of your society (China or USA) by making the most advantageous decisions possible Rules: All trades and production must be in whole units (can’t trade or produce ½ unit of steel) Only 1 trade can be made per round so plan accordingly (more than 1 unit, just cannot be with more than 1 country or multiple transactions with 1 country) Think prior to trade—consider what you’re missing out on…

4. + Round 1: No Trade End123456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960

5. + Round 2: Free Trade 2 minutes

6. + Round 3: Free Trade 2 minutes

7. + Discussion Questions American Representatives: What happened as a result of your trade? Chinese Representatives? How did you come to terms of trade?

8. + 2-Minute Paper: Individually respond to the following prompt (on back of activity sheet): Why do people and nations trade? 2 minutes

9. + Whiteboard Problem #1: Cars WashedLawns Mowed Jay205 Leah153 1.Absolute advantage: Cars? Lawns? 1.Type of problem? 1.Comparative advantage: Cars? Lawns?

10. + Whiteboard Problem #1: Cars WashedLawns Mowed Jay205 Leah153 1. Absolute advantage: Cars? Lawns? Jay has absolute in both—produce more 2. Type of problem? Output—what they’ve produced 3. Comparative advantage: Cars? Lawns? Cars: Jay (OC = ¼ L) Lawns: Leah (OC = 3 C)

11. + Whiteboard Problem #2: Homework Assassins Seniors Juniors 10 3 512 1.Absolute advantage: Homework? Assassins? 2. Comparative Advantage: Homework? Assassins? 3. Who will import homework?

12. + Whiteboard Problem #2: Homework Assassins Seniors Juniors 10 (OC = ½ H) 3 (OC = 4H) 5 (OC = 2A)12 (OC = ¼ A) 1.Absolute advantage: Homework? Juniors Assassins? Seniors 2. Comparative Advantage: Homework? Juniors Assassins? Seniors 3. Seniors (specialize in A)

13. + Whiteboard Problem #3: PlanesCars A Co.48 Z Co.618 *Number of days needed per unit. 1. Type of problem? 2. Comparative advantage: Planes? Cars? 3. Terms of trade for 1 unit of planes?

14. + Whiteboard Problem #3: *Number of days needed per unit. PlanesCars A Co.48 Z Co.618 1. Type of problem? INPUT (opposite goes under) 2. Comparative advantage: Planes: Z Co. (OC = 1/3 C) Cars: A Co. (OC = 2 P) 3. Terms of trade for 1 unit of cars? Between 2 and 3 planes

15. + Whiteboard Problem #4: BreadSteel USA10 China93 1. Comparative advantage in the production of bread? 2. If both specialize and trade, who will import steel? 3. Terms of trade for 1 unit of bread? 4. Terms of trade for 1 unit of steel?

16. + Whiteboard Problem #4: BreadSteel USA10 China93 1.Comparative advantage in the production of bread? China (OC = 1/3 S vs OC 1 S in USA) 2. If both specialize and trade, who will import steel? China (OC of 3 B per S is higher than USA: 1 B) 3. Terms of trade for 1 unit of bread? Between 1/3 and 1 Steel 4. Terms of trade for 1 unit of steel? Between 1 and 3 Bread

17. + 2003 FRQ: Comparative Advantage & Terms of Trade Complete independently (on activity sheet): QUESTIONS???