Today we will learn about the theory of comparative advantage and how it explains the benefits of free trade. We will also study the reasons that countries block free trade (barriers to trade) and the inefficiencies that result from this protectionism.
Assignments
Read: Krugman (Module 44)
Watch: The video lecture for today's topic (linked above).
Optional: The videos linked below.
Classic Hopkins
The two videos below are examples of how to solve comparative advantage problems
Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.
Problem of the Day
Use a graph to explain how a nation will benefit when it transitions from a closed economy to an open one and ends up importing goods.
Draw a graph to show how a country that ends up exporting goods benefits from free trade.
Draw a graph to show the effects of a tariff.
Draw a graph to show the effects of a quota.