1. Globalization
Globalization is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happen. The global economy is sometimes referred to as a globality, characterized as a totally interconnected marketplace, unhampered by time zones or national boundaries

2. Absolute Advantage
Absolute Advantage is when a country can produce more of a good than another country using the same quantity of resources
Investopedia video clip
EOC study guide
Globalization #2

3. Absolute Advantage Example:
U.S. can produce 1,000 tons of wheat in a week
Japan can produce 100 tons of wheat in a week
In this case, who has the absolute advantage in wheat production?
US!

4. Comparative Advantage
Comparative Advantage is specializing in the production of a good it can produce at a lower opportunity cost.
Investopedia video clip
EOC study guide
Globalization #1

5. Benefits of Trade
Comparative Advantage video

6. quiz What is the definition of opportunity cost?
The money you spend to buy something.
The next best alternative that you give up.
The chance that you will lose your money.
All of the choices you could have made but didn't.

7. quiz
What is the term to describe when a nation or individual can produce a good or service at a lower opportunity cost than another nation or individual?
Specialization
Trade
Opportunity
Comparative Advantage

8. quiz What does comparative advantage measure?
How much it costs to produce a good or service.
How many resources a nation has.
How much each nation gives up in one good to produce another good.
None of these options

9. Comparative Advantage
When country A produces 1 unit of wheat, they give up producing ½ a TV. In other words, Country A’s opportunity cost is ½ a TV.
When Country A produces 1 TV, the opportunity cost is 2 units of wheat.
What are Country B’s opportunity costs?
Production Possibilities
Country A
Country B
Wheat
200 50
TVs
100

10. Robinson Crusoe Who has absolute advantage in fish? Friday
Who has absolute advantage in coconuts?
What is Crusoe’s opportunity cost of catching a fish?
10 coconuts
What is Friday’s opportunity cost of catching a fish?
15 coconuts
What is Crusoe’s opportunity cost of picking a coconut?
1/10 of a fish
What is Friday’s opportunity cost of picking a coconut?
1/15 of a fish
Friday

11. The world ends up with more
Everyone Wins With Trade!
The world ends up with more

12. Complete Worksheet Ch 15 sec 1
ATK TIME!
Complete Worksheet Ch 15 sec 1
Trade creates wealth

13. International Cooperation and Agreements
International trade agreements can lead to international prosperity and peaceful relationships
North American Free Trade Agreement, NAFTA
eliminated trade barriers between US, Canada, and Mexico
Signed by President Bill Clinton in 1994
the overall value of intra-North American trade has more than tripled since the agreement's inception
EOC study guide
Globalization #5

14. International Cooperation and Agreements Cont.
European Union, EU
over 28 member nations
creates free-trade zones that reduce or eliminate trade barriers
created a single currency
EOC study guide
Globalization #6

15. International Cooperation and Agreements Cont.
World Trade Organization, WTO
negotiates new trade agreements
resolves trade disputes
From the average tariff in the US dropped from 59% to 5%
EOC study guide
Globalization #8

16. Causes of economic growth?
Little to no government debt
Low taxes and tariffs invite immigrants
Increase in productivity
EOC study guide
Globalization #10

17. organizations working to raise the standard of living in majority countries
World Bank
Aims to reduce poverty in middle-income and poorer countries
Provide low-interest loans and grants for
Education
Health
Infrastructure
Agriculture
Primarily a development institution
EOC study guide
Globalization #9

18. organizations working to raise the standard of living in majority countries
International Monetary Fund (IMF)
Seeks to maintain an orderly system of payments and receipts between nations.
Ensure the stability of international monetary system (exchange rates)
Facilitate international trade
EOC study guide
Globalization #7

19. The Costs and Benefits of Globalization
Get with a partner and read through pages in the textbook.
Create a two columned list describing the benefits and costs of globalization
You MUST EXPLAIN----GIVE EXAMPLES