1. McGraw-Hill/Irwin © 2012 The McGraw-Hill Companies, All Rights Reserved Chapter 3: Why Everybody Trades: Comparative Advantage

2. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-2

3. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-3 Exports, 2009 (Billions of U.S. Dollars)

4. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-4 Exports Plus Imports as a Percentage of GDP

5. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-5 Volume of World Trade and World Production, 1960-2010

6. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-6 Figure 2.2 The Market for Motorbikes: Demand and Supply

7. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-7 Figure 2.3 The Effects of Trade on Production, Consumption, & Price Figure 2.3 The Effects of Trade on Production, Consumption, and Price Shown with Demand and Supply Curves

8. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-8 Figure 2.4 The Effects of Trade on Well- Being of Producers, Consumers, and the Nation as a Whole

9. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-9 Figure 2.4 The Effects of Trade on Well- Being of Producers, Consumers, and the Nation as a Whole

10. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 3-10 Welfare Effects of Free Trade