2. Advanced Economics Week #6 Spring 2012

3. Advanced Economics 4/30/12 http://mrmilewski.com OBJECTIVE: Begin examination of Globalization. I. Journal#17pt.A -Watch the following: -Renewed Recessions Rock Europe Amid Slower Growth in U.S.Renewed Recessions Rock Europe Amid Slower Growth in U.S. II. Return of Chapter#10&13 Test III. Journal#17pt.B -notes on globalization Notice: Homework Due 5/14/12: Ch#18sec(1-4) Notice: 22 Days until the Senior’s Last Day!

4. What is international trade? When goods and services are bought and sold between nations. Import – something made in another nation and sold here. Export – something made here and sold in another nation.

5. Why do nations trade? Not all nations can produce what they need at home. For example, Japan is an industrial nation, yet they have no domestic sources of oil. They import it. The United States uses more energy than we produce, so we have to import oil. We produce more food than we can consume. We export crops like wheat and corn, but we also import food like bananas and coffee because the climate in the United States isn’t right for those products.

6. Why trade? Specialization – assignment of tasks so that each worker performs fewer tasks more frequently i.e. – Detroit specializes in cars, Florida in oranges, Texas in cattle Exports – what a nation specializes in. Individuals engage in trade because they believe what they gain is equivalent in value to what they give up.

7. Advantage Absolute advantage – when one country can produce more of a product than another country Comparative advantage – the ability of a nation to produce a product at a relatively lower opportunity cost than another nation.

8. Advantage Opportunity cost – cost of the next best alternative use of money, time, or resources when one choice is made over another

9. Alpha & Beta Country A PPF – -40 lbs of coffee -8 lbs of cashew nuts Opportunity cost -5 coffee for 1 cashew Country B PPF- -6 lbs coffee -6 lbs cashew nuts Opportunity cost -1 coffee for 1 cashew

10. Before & After Trade Before Trade Alpha produced -20 lbs coffee -4 lbs cashews Beta produced -5 lbs coffee -1 lbs cashews Totals -25 lbs coffee -5 lbs cashews After Trade Alpha specializes in coffee -40 lbs coffee -0 lbs cashews Beta specializes in cashews -0 lbs coffee -6 lbs cashews Totals -40 lbs coffee -6 lbs cashews

11. The Gains of Trade Ch#17 sec#1 p. 469 Figure 17.2aFigure 17.2b

12. Advanced Economics 5/1/12 http://mrmilewski.com OBJECTIVE: Continue examination of Globalization. I. Administrative Stuff -attendance II. Film: Commanding Heights Episode#2 -questions on film about globalization Notice: Homework Due 5/14/12: Ch#18sec(1-4) Notice: 21 Days until the Senior’s Last Day!

13. Advanced Economics 5/2/12 http://mrmilewski.com OBJECTIVE: Begin examination of Globalization. I. Administrative Stuff -Attendance II. Journal#18: Commanding Heights episode#2 -notes on the Commanding Heights Notice: Homework Due 5/14/12: Ch#18sec(1-4) Notice: 20 Days until the Senior’s Last Day!

14. Advanced Economics 5/3/12 http://mrmilewski.com OBJECTIVE: Examine the comparative economic spectrum. I. Journal#19pt.A -Watch the following: -After the Fall: People, Banks 'Still Cautious' on Credit, DebtsAfter the Fall: People, Banks 'Still Cautious' on Credit, Debts II. Journal#19pt.B -Read “Karl Marx” p. 500 & Political spectrum on the board Notice: Homework Due 5/14/12: Ch#18sec(1-4) Notice: 19 Days until the Senior’s Last Day!

15. Advanced Economics 5/4/12 http://mrmilewski.com OBJECTIVE: Examine the comparative economic spectrum. I. Journal#20pt.A -Watch the following: -Troubling New Signs Plague European, U.S. EconomiesTroubling New Signs Plague European, U.S. Economies II. Journal#20pt.B -notes on comparative economic systems Notice: Homework Due 5/14/12: Ch#18sec(1-4) Notice: 18 Days until the Senior’s Last Day!

16. Types of Economic Systems