Comparative and Absolute Advantage Economics

1. Buy
American

2. Where was I made?
United States
Honduras
Thailand
Haiti
China
Bangladesh
Taiwan
Brazil
Buy American

3. Why should people in the United States buy
American made products?
At least three sentences.
Why Buy?

4. Guess Where
Revealed…

5. Debrief
1. Why do so many of you purchase
foreign made goods? What was
your incentive for buying from foreign
producers?
2. If you are using American-made
products, what was your incentive for
purchasing them?
3. Did your purchase of foreign-
made goods make our country
better or worse off?

6. So Many Goods-
So Many Places
Absolute and Comparative
Advantage

7. Lets meet……..

8. Absolute Advantage
Barbie Ken
Cooking
Cleaning
Time
10 Min. 40 Min.
20 Min. 30 Min.
Who takes the least
amount of time to do
their work ?
30 Min. 70 Min.

9. Barbie has an absolute advantage
in cooking and cleaning.

10. Remember
opportunity cost?

11. 4/3 or 1&1/3
Cleaning
Cooking
Cleaning 2 Meals
Comparative Advantage
Barbie Ken
Cooking 10 min. 40 min.
Cleaning 20 min. 30 min.
Opportunity Cost of Doing a Job
½ Cleaning
¾ Meal
When Barbie decides
to clean, how many
meals is she giving
up?
When Ken cooks,
what dose he give
up?
Barbie has the comparative advantage
in cooking.
Ken has the comparative advantage in
cleaning.

12. Comparative Advantage
Barbie Ken
Cooking 10 min. 40 min.
Cleaning 20 min. 30 min.
30 min. 70 min.
AFTER SPECIALIZING IN ONE JOB!
Ken = cleans (2) rooms in 60 min. and saves 10min.
Barbie = cooks (2) meal in 20 min. and saves 10 min.
*Specialization allows Barbie and Ken more time to engage
in more productive behavior! (and fight less)