Autarky describes a situation when countries are completely closed to trade. In this video, we explore what happens to the domestic price of a good, consumer surplus, and producer surplus, when an autarkic country opens to trade.
This series of slides presents the production possibilities frontiers for Alphatown and Omegaville and illustrates their comparative advantage in the production of apples and potatoes, leading to specialization and trade.
In the Comparative Advantage courses, students meet Jack Of All Trades, a most awesome superhero. In all tasks, Jack can do everything better and faster (he has absolute advantage), but does that mean he must do everything while the rest of the people stand around helplessly? Find out if justice is served when a formerly idle citizen, Andy, wades through the depths of opportunity cost and the benefits of comparative advantage.
Is international trade good for Americans? The November 2017 issue of Page One Economics provides the ins and outs of trade, including some history, the costs and benefits, and policy choices.
Students learn that money is a medium of exchange that facilitates economic activity. Next, students learn the relationship between the money supply and inflation by participating in an inflation auction using gold and silver notes to better understand the historic debate of the Free Silver Movement. Students then read William Jennings Bryan's "Cross of Gold" speech to relate the historical context. The students use historical data to calculate income, fixed expenses, and variable expenses of a farmer to further understand the historical argument presented by the Free Silver Movement. Finally, students analyze two political cartoons against the Free Silver Movement. This lesson includes primary source documents obtained from FRASER¨.
To understand why people trade, suppose you were limited to consuming only items you could find within walking distance of your house. Or, perhaps even worse, only items you could produce yourself. For most of us, this restriction would severely diminish the variety of goods and services we enjoy on a daily basis. Therefore, the simplest answer to the question is that people (or entire countries) trade because they will enjoy a wider variety of goods.
GDP is a useful measure of the health of the economy, and it’s among the most important and widely reported economic data. However, the current “textbook treatment” of how international trade is measured as part of GDP can lead people to misunderstand the role trade plays in the economy. The September 2018 issue of Page One Economics intends to correct misconceptions and provide clear instruction on how imports affect GDP.
In this lesson, students listen to a story about a little girl who wants to make an apple pie. When she finds the market closed, she travels around the world gathering natural resources to make the pie. Students will follow along with the story by connecting each natural resource to its country of origin and pointing out those places on a globe or world map. They will also identify the capital goods used to transform the natural resources into ingredients by examining the pictures from the book. Students will take part in two rounds of a trading activity, collecting the ingredients required for vanilla ice cream to go along with the apple pie. They will learn about trade and how middlemen, such as grocery stores, help make trade easier.
Module on international finance. Intended for community college students and aligned with the requirements for POLS 140: Introduction to International Relations within the California Community College system. Includes readings, lesson plan, and ancillary materials (lecture slides and handout).
Historically, international trade has played a critical role in enabling countries to grow, develop, and become economically powerful. Through international trade in goods and services, the economies of different countries are more closely linked to one another now than ever before. At the same time, the world economy is more turbulent now than it has been in decades. Keeping up with the shifting international environment has become a central concern in business strategy and national economic policy. This course uses the same fundamental methods of analysis deployed in other branches of economics, as the motives and behavior of individuals and firms remain the same whether they are in the context of international trade or domestic transactions. The student will learn, however, that international trade introduces an entirely new and different set of concerns as well. Upon successful completion of this course, the student will be able to: Have a good understanding of the fundamentals of global economics; Have a rounded overview of the modern international trade theory; Understand the current world trading system and the basic rules underlying this system; Study and discuss historic, current, and emerging economic models in the United States and around the world; Understand recent developments in the field of international macroeconomics and perform an independent study in this field; Acquire and demonstrate analytical and problem solving skills to discuss and analyze the global economic environment within which business operate; Acquire an analytical framework to examine contemporary international economic issues; Acquire a general overview of international trade, the foreign exchange markets, and the issues arising from the globalization of markets; Understand the concepts of foreign exchange, its importance to individuals, businesses, and the performance of national economies, and how foreign exchange markets work; Analyze policy issues related to international trade; Understand the legal system governing international economic transactions and international economic relations; Assess actual dispute settlement proceeding and discuss several dispute settlement cases that address a wide variety of issues such as antidumping, subsidy, safeguard, and environment; Answer the four trade questions: 'Why do countries trade?,' 'How does trade affect production and consumption in each country?,' 'Which country gains from trade?,' and 'Within each country, who are the gainers and losers from opening trade?' (Economics 307)
As Adam Smith said, everyone lives by exchanging. They exchange—buy and sell—to make themselves better off. Does the same principle apply to international trade? Do nations benefit from importing and exporting? The November 2016 issue of Page One Economics explains the basics of international trade and its importance to the economy.
This course takes a look at the basic theories of international trade and the consequences of trade in today's global economy. You'll have the opportunity to learn more about fundamental ideas such as comparative advantage, increasing returns to scale, factor endowments, and arbitrage across borders. The consequences we discuss include the effects of offshoring, how trade has shaped the economies of China, Mexico, and Korea, when foreign direct investment is desirable, and the history of free trade and tariffs, among other topics. Trade is a topic of increasing importance and this material will give you a better grasp on the theories and empirics as they have been developed by economists.
International Trade: Theory and Policy is built on Steve Suranovic's belief that to understand the international economy, students need to learn how economic models are applied to real world problems. It is true what they say, that ”economists do it with models.“ That's because economic models provide insights about the world that are simply not obtainable solely by discussion of the issues. International Trade: Theory and Policy presents a variety of international trade models including the Ricardian model, the Heckscher-Ohlin model, and the monopolistic competition model. It includes trade policy analysis in both perfectly competitive and imperfectly competitive markets.
Strong is usually preferred over "weak." But for the value of a country's currency, it's not that simple. "Strong" isn't always better, and "weak" isn't always worse. Learn more about foreign exchange rates in the March 2015 newsletter—"Is a Strong Dollar Better than a Weak Dollar?"
Trade issues occasionally dominate and are a continuing theme of the international scene: the global market, sweatshops, child labor, trade deficits, the euro, sanctions, tariffs, embargoes, and the EU, NAFTA, WTO, the seemingly endless alphabet of interest groups, treaties, organizations, and trade agreements. As a classroom topic, international trade has the great advantage of providing ready-made material for teachers wanting to engage student interest in current events. On the other hand, the complexity of the issues surrounding trade is daunting. While economic reasoning doesn't guarantee resolution of the issues, it is a powerful tool of critical thinking that brings clarity to the discussion of current events. The ability to determine comparative advantage through opportunity cost, the ability to identify incentives and predict resulting behavior, and the ability to use supply and demand analysis of particular labor and resource markets, help students to set aside the emotion of international trade issues and cut through the rhetoric of media reports.
They say that "money makes the world go round." Just imagine a world without money as our method of payment for everyday transactions. Without money, we would all need to barter for necessary goods and services. For example, suppose an accountant needs to have her car fixed. Under a barter system, she would have to find someone who needed some tax advice in exchange for car repairs. The search to find a barter partner is time consuming and wasteful. Money solves this problem and many others. Read more about the three main functions of money and the damaging effects of too much inflation on these functions in the March 2013 issue.
After reading and discussing a story about a family during the Great Depression, students differentiate between goods, services, barter, and money. Students are led through several rounds of a barter activity that incorporates math skills. Through this activity, students learn about the difficulties of using barter to satisfy wants.
Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters.Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition.