Summer Semester: Comparative Advantage

INTRODUCTION

Today we will learn about the theory of comparative advantage and specialization and trade. You should have read the text chapter identified below in the homework section and watched the related videos. This page contains all the information you need for today's class. Use the table of contents on the right to help you navigate. Click here to download a PowerPoint presentation on this topic.

SESSION 2 PLAN

1. First half hour: Why did Europe sell guns, Africa sell slaves, and the Americas sell rum and cotton as part of the Atlantic slave trade? Your teacher will lecture on this session's concepts and that question after showing this video.

2. Second half hour: Do today's problem of the day (below).

3. Additional resources: If you need more explanation here are some additional resources you can use.

   • Read Krugman (Module 4)

   • Watch these videos:

PROBLEM OF THE DAY

Do this problem set to learn how to do comparative advantage problems and get practice in doing them. Click here to see the answers to the problem set.

APPLICATION

EXTENSION

• Does Third World Growth Hurt First World Prosperity?

• Trade, competition, and living standards

• "In Praise of Cheap Labor"

• "The Case for Sweatshops"

• When Cheap Foreign Labor Gets Less Cheap ("Re-shoring")

• In Shift of Jobs, Apple Will Make Some Macs in U.S. ("Re-shoring")

  • The right-to-work dilemma