文档介绍：Interdependence and the Gains from Trade
Chapter 3
Interdependence and Trade
Consider your typical day:
You wake up to an alarm clock made in Korea.
You pour yourself some orange juice made from oranges grown in Florida.
You put on some clothes made of cotton grown in ia and sewn in factories in Thailand.
You watch the morning news broadcast from New York on your TV made in Japan.
You drive to class in a car made of parts manufactured in a half-dozen different countries.
…and you haven’t been up for more than two hours yet!
Interdependence and Trade
Remember, economics is the study of how societies produce and distribute goods in an attempt to satisfy the wants and needs of its members.
How do we satisfy our wants and needs in a global economy?
We can be economically self-sufficient.
We can specialize and trade with others, leading to economic interdependence.
Interdependence and Trade
A general observation . . .
Individuals and nations rely on specialized production and exchange as a way to address problems caused by scarcity.
Interdependence and Trade
But, this gives rise to two questions:
Why is interdependence the norm?
What determines production and trade?
Why is interdependence the norm?
Interdependence occurs because people are better off when they specialize and trade with others.
What determines the pattern of production and trade?
Patterns of production and trade are based upon differences in opportunity costs.
Imagine . . .
only two goods: potatoes and meat
only two people: a potato farmer and a cattle rancher
What should each produce?
Why should they trade?
A Parable for the Modern Economy
The Production Opportunities of the Farmer and the Rancher