Presentation on theme: "Module Comparative Advantage and Trade KRUGMAN'S MACROECONOMICS for AP* 4 Margaret Ray and David Anderson."— Presentation transcript:
Module Comparative Advantage and Trade KRUGMAN'S MACROECONOMICS for AP* 4 Margaret Ray and David Anderson
Housekeeping Read Module 4 – do C/U and tackle the test. Quiz early next week on comparative advantage.
What you will learn in this Module : How trade leads to gains for an individual or an economy The difference between absolute advantage and comparative advantage How comparative advantage leads to gains from trade in the global marketplace
Why do nations trade? ????
Why do Nations Trade? Specialization leads to…. Gains from trade PROVE IT!
Convert input questions into opportunity costs. Convert input questions into opportunity costs. Hrs / product DonutsCoffee Livingston1unit2 units Montclair1 unit3 units Montclair has a comparative advantage in coffee, and Livingston has one in donuts.