1. Would Americans be better off if we purchased less from foreigners?

2. International Trade In what ways do you engage in trade?

3. Specialization What do you plan to specialize in?

4. Milton Friedman—The story of a pencil

5. The Basis for all Trade: Absolute and Comparative Advantage KarateEconomics

6. Absolute Advantage When a country can produce a good more efficiently than another country CoffeeCashews Country A 204 Country B 51

7. Comparative Advantage The ability to produce a product relatively more efficiently, aka, a lower opportunity cost CoffeeCashews Country A 400 Country B 06 Total 406 Before Trade After Trade

8. History of American Trade Smoot-Hawley Tariff Act—1930 – Raised tariffs on 20,000 imported goods – Result: huge decline in standard of living across all trading groups

9. History of American Trade WWII and after— promotion of free trade NE—Wheelan: why would we put sanctions on ourselves?

10. NAFTA

11. Signed in 1994 by Clinton—created a trade bloc between US, Canada, and Mexico

12. Protectionism Tariffs Quotas Regulations

13. Why Protectionism? Protect domestic industries and employment Strategic/National interest goals Political pressure Protect culture

14. Neo-colonialism? Mexico Bribery Scandal Mexico Bribery Scandal

15. Fair Trade? International trade with a focus on quality of life and a more equitable global economic trading system Top 5 Worst Sweatshop Offenders Top 5 Worst Sweatshop Offenders

16. Alex Tabarrok--Economic Growth