1. Trade and Globalization

2.  Understand how the subprime mortgage crisis was a moral hazard problem  Explain the difference between absolute advantage and comparative advantage

3. Subprime Mortgage crisis  Explain how the moral hazard problem helped create the subprime mortgage crisis  Focus  Banks  Investment banks  buyers

4.  According to the author how does trade make us richer?

5.  How does trade create losers? Please give some examples

6.  What is protectionism? In the long run how can it be harmful?

7.  The author claims trade lowers the cost of goods, which is the same as raising incomes. What does he mean?

8.  According to the author how does trade benefit poor countries?

9.  Do you agree with the author’s statement that trade is based off of voluntary exchange? Why or why not? Use examples

10.  What is the comparative advantage of workers in poor country?

11. Absolute Advantage  The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

12. Comparative Advantage  The ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals.