Today we will learn about the theory of comparative advantage and the terms of trade, ideas central to understanding international trade.
HOMEWORK
Read Mankiw (Chapter 3) and watch the following videos, when you have time.
The two videos below are examples of how to solve comparative advantage problems
Formative Assessment (MCQ's): You will be assessed on your understanding of today's topics by answering a series of MCQ's. Your score will be used to place you in one of two groups. Those who demonstrate proficiency or mastery will delve deeper into these topics with one of the teachers. Those who still need improvement on the basic concepts will work with the other teacher to ensure proficiency.
Post-assessment Activities
Group #1: Students who demonstrate proficiency or mastery will go to H322 to delve deeper into these concepts and work on applying them to real world situations. Below are some resources that you may use during this time. You may also do the Problem of the Day or work on the Critical Thinking Project during this time.
Group #2: Students who still need to improve their understanding of today's concepts will stay in H403 doing activities that will help to ensure proficiency. Below are some resources that you may use during this time. Also, you may do the Problem of the Day below as a way to increase your understanding of the material.
PPT's
Problem Sets
Problem of the Day
Classify each of the of the following statements as positive or normative and explain.
Society faces a short-run trade-off between inflation and unemployment.
A reduction in the rate of money growth will reduce the rate of inflation.
The central bank should reduce the rate of money growth.
Society ought to require welfare recipients to look for jobs.
Lower tax rates encourage more work and more saving
Lecture: The theory of comparative advantage and the terms of trade (PDF below)
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