Ch 5 Global Trade [AP & Reg]

Myownppc only 5 1 bread coffees bread 45 50 40 10 o

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Unformatted text preview: cheeseheads] [We – – – – • Wisconsin should specialize in cheese Florida should specialize in orange production Florida Then trade cheese for oranges Cheeseheads More cheese and oranges for everyone! Disadvantages: – Job losses among dairy farmers in Florida – Job losses among orange growers in Wisconsin • Advantage: - Job gains among dairy farmers in WI and job gains among orange growers in FL more than make up for the other job losses. - Trade is beneficial for both states as a whole … … though not for all residents. Co mparative and Abs o lute Advantage Coffee C o ffe e [Comparative Advantage can produce at a lower productive opportunity cost] aiti’s DCC Cuba’s DCC a iti’s Haiti B = __ C 1B = __ C Cuba 100 costs 4 costs 100 1 /5 90 X 1/5 _ B = 1C __ B = 1C 6 1/4 costs 1/6 costs But CPC is out here 80 PPC is still here Terms of Trade Trade “I can consume “A prisoner of can only on my PPC.” my own PPC.” only 5 1 bread = __coffees bread 45 50 40 10 o Bread 20 X 5 7.5 9 0 Bread 15 18 Wo rld CC 1 Bread=__ C...
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