Question of the Day
• There are two presidents buried at
Arlington National Cemetary. One is John
F. Kennedy. Who is the other one?
• One of the first presidents in the 20th
• William Howard Taft
• Inside voices.
• No “forced” trades. (Don’t steal from each
• You must vote every single round.
• 3 minutes per trading session (I may
shorten that if everyone appears to have
• How many people made trades?
• Which items were most popular? Least
• Did anyone trade more than once? Why?
Did anyone not trade?
• How might we explain the satisfaction
points on the board?
• Was everyone happy with their trades?
• If we were to observe 20 people buying
groceries, what might we conclude about
their gains and losses? Their wealth?
• Imports: Goods or services that an
individual (or country) trades for.
• Exports: Goods or services that an
individual (or country) trades away.
• What is the relationship between exports
Absolute vs. Comparative
• Absolute advantage: When one nation can
produce an item with fewer resources than
another nation can.
• Better technology, better production
• Comparative advantage: The ability to
produce an item at a lower opportunity
• Countries or individuals will export (trade
away) items they have a comparative
advantage in producing. Why?
Barriers to Trade
• Export Subsidy
• Why might a country put up barriers to
• What is the difference between a “quota”
and a “tariff?”
North American Free Trade
• Canada, United States, & Mexico
• Reduces tariffs and other barriers of trade
between these countries.
• Free-trade, at least among individuals,
makes everyone better off.
• The WTO and NAFTA are organizations
that promote free-trade but are very
• We will discuss these more in-depth
when we talk about current economic
issues next week.
• Countries and individuals trade what they
are good at making for things they are not