PRESENTATION OUTLINE
Globalization & Protectionism
Today's Terms
- globalization
- comparative advantage
- absolute advantage
- specialization
the increasing economic integration and interdependence of national, regional, and local economies across the world
Video Points to Note
- How is "gunpowder" and "MS Works" discussed
- What happen to manufacturing in the US from 1950 to 2014
- What has happen to educated and uneducated people during globalization
- Which natural resources are in danger
- What is the last problem stated about globalization
Can you think of some pros and cons of Globalization
the ability of a country to produce goods and services at a lower opportunity cost than other countries
The ability to produce something using fewer resources than other producers
Question # 1
Should a country produce everything it wants?
Why or Why not?
No, a country should produce items for which it has a comparative advantage and trade for other items. If they follow this rule they can obtain more without working any harder
Specialization
is a method of production where a business, area or economy focuses on the production of a limited scope of products or services
Question # 2
If Country A is better than Country B at producing everything, would Country A gain anything by trading with Country B?
Yes, just because a country has an absolute advantage does not mean it should produce the item. A country should specialize in whatever it has a comparative advantage in.
Question #3
When a new home is built, why doesn't one contractor do everything: carpentry, electrical, plumbing and landscaping?
Because people specialize in what they are good at. For example, while the electrician may be able to do plumbing he has a comparative advantage in electrical work. Instead of trying to do plumbing he should do more electrical work and pay a plumber to do the plumbing. Both contractors are better off in this scenario
Question # 4
Brainstorm the "type" of goods and services in which the United States likely has a comparative advantage.
activities requiring more formal education
Top US Exports in 2015
- Machines, engines, pumps: US$205.8 billion (13.7% of total exports)
- Electronic equipment: $169.8 billion (11.3%)
- Aircraft, spacecraft: $131.1 billion (8.7%)
- Vehicles: $127.1 billion (8.4%)
- Oil: $106.1 billion (7.1%)
- Medical, technical equipment: $83.4 billion (5.5%)
- Plastics: $60.3 billion (4%)
- Gems, precious metals, coins: $58.7 billion (3.9%)
- Pharmaceuticals: $47.3 billion (3.1%)
- Organic chemicals: $38.8 billion (2.6%)
Which "type" of goods and services would the US likely have a comparative disadvantage in producing
list some goods and services the United States likely has a comparative disadvantage in producing.
Describe a nation that would have a comparative advantage in these goods or services?
government-imposed restraint(s) on the flow of international goods or services.
tax imposed on imported goods and services.
trade restriction that limits the number, or in certain cases the value, of goods and services that can be imported or exported during a particular time period
an official ban on trade or other commercial activity with a particular country
glob·al·ist
ˈɡlōbəlist/
noun
a person or organization advocating or practicing operations (such as trade) across national divisions.